The US labor market saw an impressive surge in January with the addition of 517,000 jobs, despite the Federal Reserve’s efforts to control inflation through increased interest rates. The unemployment rate remained stable at 3.4%, even though economists had anticipated a slight rise. This rate, comparable to pre-pandemic levels, is now at a 53-year low, according to Bloomberg data—far surpassing the economists’ projection of 185,000. This marks an acceleration of labor market activity, which had shown signs of moderation in the latter part of 2021 but remained in growth. In comparison, December saw a comparatively lower increase of 223,000 jobs compared to the average of 539,000 new jobs added per month in early 2022.
Earlier predictions of a slowdown in the labor market were based on several recent data releases indicating a slower pace of job creation. On Wednesday, Feb 1st, ADP, the largest payroll supplier in the US, reported that private employers added 106,000 jobs in January, significantly less than the job additions seen in December. ADP attributed the slowdown to adverse weather conditions that disrupted work in December.
“In January, we saw the impact of weather-related disruptions on employment during our reference week,” the ADP chief economist, Nela Richardson, said in a statement. “Hiring was stronger during other weeks of the month, in line with the strength we saw late last year.”