The U.S. added 517,000 jobs in January, according to the Labor Department’s jobs report released Friday, way ahead of the consensus forecast of 187,000 jobs gained.
The unemployment rate dipped to 3.4 percent, despite a wave of recent layoffs announced by major companies and concerns that the Federal Reserve’s interest rate hikes would spark a recession.
“Today’s jobs report is almost too good to be true,” Julia Pollak, chief economist at ZipRecruiter, said in a note.
Biggest gains come in leisure and hospitality
The jobs report released by the Labor Department showed that food and drinking establishments have experienced significant employment growth. (Getty)
Leisure and hospitality added 128,000 jobs, the most of any sector, up from the average of 89,000 in 2022, but still remains below pre-pandemic levels by 495,000 jobs. Food services and drinking places led the way, adding 99,000 jobs.
Professional and business services added 82,000 jobs, up from last year’s monthly average of 63,000. Jobs in professional, scientific and technical services added 41,000 jobs despite recently announced layoffs in the tech industry.
Last month, Google announced 12,000 layoffs, Microsoft cut 10,000 jobs and other tech companies such as Amazon, Salesforce and IBM have announced thousands of job reductions.
Of the more than 100,000 layoffs announced last month — the highest monthly figure since September 2020 — around 40 percent were in the tech industry, according to a report from employment firm Challenger, Gray & Christmas.
Friday’s jobs report also showed that government employment rose by 74,000 jobs. The health care sector added 58,000 jobs. Both sectors saw job growth beyond their 2022 monthly average.
Retail, construction, manufacturing see surprising gains
Retail employment has had notable growth, despite evidence that consumers have cut back on spending. (Associated Press)
Retail employment rose by 30,000 jobs, bolstered by 16,000 new jobs at general merchandise retailers, despite evidence that consumers are slowing their spending. That’s up from the average monthly gain of 7,000 jobs in 2022.
Construction added 25,000 jobs, also up from last year’s monthly average, despite slowing demand in the housing market driven by higher interest rates.
Transportation and warehousing jobs stayed stable at 23,000, despite announced layoffs from FedEx this week due to weakening demand for shipped goods.
Manufacturing also trended up, adding 19,000 jobs, but lagged behind the 2022 monthly average of 33,000 jobs. Manufacturing contracted for the third straight month in January after 30 consecutive months of expansion, according to the Institute for Supply Management’s index released Wednesday.
“The seasonal adjustment may be artificially boosting job gains in these highly seasonal sectors as the usual seasonal patterns are disrupted by the pandemic and labor shortages. Employers may have wanted to hold onto seasonal workers this January even after the holidays,” Glassdoor lead economist Daniel Zhao noted in an email.
Still, Friday’s jobs report numbers indicate that the labor market remains robust despite widespread layoffs by tech companies and some other industries.
“By many, many indicators, the job market is still very strong,” Federal Reserve Chairman Jerome Powell told reporters Wednesday.
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