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Job Growth Crushes Expectations As Labor Market Remains Red Hot
February 2, 2024
Hiring was booming in January, as the month’s job creation numbers nearly doubled expectations, defying expectations that the economy would cool heading into 2024.
The nation’s employers added 353,000 jobs last month, according to the Labor Department. That was the strongest in a year and nearly double the 185,000 that economists polled by Dow Jones had been expecting.
The report also showed that December’s job growth was far more robust than initially thought, undercutting what many saw as the initial signs of a slowdown in the labor market. The month saw a gain of 333,000, which was an upward revision of 117,000 from what was initially reported. November also saw a more modest upward revision of 9,000, bringing the month’s total to 182,000.
The unemployment rate held steady in January at 3.7% instead of the increase to 3.8% that economists had been anticipating. Wage growth also topped expectations, climbing 4.5% last month from a year earlier, well above the 4.1% forecast. The wage gains came amid a decline in average hours worked, which fell to 34.1, down 0.2 hours from the month before.
Job growth was widespread across industries last month, led by professional and business services with 74,000. Other significant contributors included health care (70,000), retail trade (45,000), government (36,000), social assistance (30,000) and manufacturing (23,000).
While the report was positive news for the economy, it complicates the path forward for the Federal Reserve and vindicates recent posturing from the Fed that rates would remain high for longer than many investors anticipate.
The futures markets shifted following the report’s release, with traders now pricing in a better than 80% chance that the Fed does not cut rates at its next meeting in March, according to data from the CME Group.
