The U.S. economy added 467,000 jobs in January. The official unemployment rate ticked up slightly to 4% from 3.9% in December, as more people moved off the sidelines to enter the labor market. Over the past 12 months, the United States has added nearly 7 million jobs.
Stocks jumped on the news. (Well with a little help from the typical Friday bounce after a tough few days and a big post-earnings report by shares of Amazon, (AMZN), which closed up 13.54% on the day.)
The Standard & Poor’s 500 gained 0.52% while the Dow Jones Industrial Average (which doesn’t have any Amazon exposure) fell 0.06%. The NASDAQ Composite (which has lots of Amazon exposure)gained 1.58%. The small cap (hence no Amazon) Russell 2000 index, nonetheless, added 0.57%.
The Bureau of Labor Statistics also revised the jobs performance of the U.S. economy higher for November and December. The U.S. economy added 647,000 in November, not the 249,000 the agency had earlier estimated, and it added 510,000 jobs in December not the 199,000 initially reported. That means the economy some 700,000 more jobs at the end of last year than previously estimated.
Those revisions a well as the strong jobs performance in January are more evidence, as if the Federal Reserve needed any, that the economy is strong enough to withstand the drag of interest rate increases in March. (The Fed next meets in interest rates on March 16.)
Average hourly earnings increased by 23 cents in January to $31.63, up 5.7% year over year. It was the largest monthly increase in the 12 months. The year over year gains, however, werpretty much wiped out by inflation over the last year.
The industries experiencing growth in January were led by the leisure and hospitality sector, which added 151,000 jobs, mostly in restaurants and bars. Professional and business services added 86,000 jobs. Retailers added 61,000 jobs in January, which is typically an off month. Transportation and warehousing added 54,000 jobs.
The labor market participation rate, a critical measurement that has suffered from people leaving the workforce during the pandemic, also went up to 62.2% from 61.9%.