US Economy Adds 353,000 Jobs in January, Unemployment Rate Holds at 3.7%
The US economy added a surprising 353,000 jobs during January according to data from the Bureau of Labor Statistics (BLS) released this Friday, recording a larger-than-expected increase at the start of 2024.
The unemployment rate remained at 3.7% compared to the previous month. It marks the 24th consecutive month that the country’s unemployment rate has been below 4%.
“The fact that the unemployment rate has been below 4% for 24 months in a row for the first time since 1967 is truly remarkable,” Joe Brusuelas, chief economist and director of RSM US, told CNN Business.
More than a year ago, it seemed almost certain that the labor market would feel the effects of the Federal Reserve’s aggressive rate-hiking campaign, but 11 gains and four pauses later, the U.S. labor market is seeing one of the longest periods of expansion this century.
January’s job gains dashed market expectations that the Federal Reserve would cut rates sooner rather than later, with investors’ likelihood of a rate cut in March falling from 38% to less than 20% according to the CME FedWatch tool.
However, the higher-than-expected figure should not derail the Fed from its current path. “The Federal Reserve will have to manage expectations very carefully going forward,” Brusuelas said.
Most industries added jobs last month, with health care and social assistance posting the biggest gains of 100,400, according to the BLS.
Hiring also accelerated starting in December, when job growth was much higher than previously estimated.
January’s gains dashed economists’ expectations, with forecasts predicting a net gain of 176,500 jobs last month, according to FactSet.
Economists have warned that January’s report is one of the trickiest to forecast due to seasonal adjustments and trends.
In addition, wage gains rose 0.6% on the month and 4.5% year over year.
“This raises the risk that nominal wage growth will not fall back to levels consistent with meeting the inflation target on a sustained basis, particularly as the labor force participation rate refuses to rise further,” wrote Brian Coulton, chief economist of Fitch Ratings.
The story is still developing and will be updated as more information becomes available.