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US Labor Market Thrives: Surging Payrolls and Wages with Unchanged Unemployment Rate

The January nonfarm payrolls report revealed a significant upside surprise, with an increase of 353,000 jobs, far exceeding the consensus forecast of 180,000. This figure not only surpasses December's revised total of 333,000 but also indicates robust job market growth, according to data released by the Bureau of Labor Statistics on Friday.

Job gains were widespread across various sectors, with notable increases in professional and business services, health care, retail trade, and social assistance. Nearly all sectors experienced job growth in January, with the exception of mining and gas extraction.

Despite these gains, the unemployment rate held steady at 3.7%. Notably, hourly wages saw their sharpest increase since March 2022, rising by 0.6% month-over-month and 4.5% year-over-year.

Our Take: The latest jobs report clearly indicates that the labor market remains robust, showing no signs of cooling. Particularly concerning for the Federal Reserve is the significant rise in average hourly earnings, which could further fuel consumer spending and inflationary pressures.


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