Posted on 02/03/2023 6:45:03 AM PST by JSM_Liberty
. Nonfarm payrolls increased by 517,000 for January, far higher than the 187,000 market estimate.
. The unemployment rate fell to 3.4% versus the estimate for 3.6%. That is the lowest jobless level since May 1969.
. Leisure and hospitality added 128,000 jobs to lead all sectors. Other significant gainers were professional and business services (82,000), government (74,000) and health care (58,000).
The employment picture started off 2023 on a stunningly strong note, with nonfarm payrolls posting their strongest gain since July 2022. Nonfarm payrolls increased by 517,000 for January, above the Dow Jones estimate of 187,000 and December’s gain of 260,000.
The unemployment rate fell to 3.4% versus the estimate for 3.6%. That is the lowest jobless level since May 1969. The labor force participation rate edged higher to 62.4%. A broader measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons also edged higher to 6.6%.
Markets slumped following the report, with futures tied to the Dow Jones Industrial Average down about 200 points. Growth across a multitude of sectors helped propel the massive beat against the estimate. Leisure and hospitality added 128,000 jobs to lead all sectors. Other significant gainers were professional and business services (82,000), government (74,000) and health care (58,000). Retail was up 30,000 and construction added 25,000.
Wages also posted solid gains for the month. Average hourly earnings increased 0.3%, in line with the estimate, and 4.4% from a year ago, 0.1 percentage point higher than expectations though a bit below the December gain of 4.6%
The surge in job creation comes despite the Federal Reserve’s efforts to slow the economy and bring down inflation from its highest level since the early 1980s. The Fed has raised its benchmark interest rate eight times since March 2022. In its latest assessment of the jobs picture, the Fed on Wednesday dropped previous language saying gains have been “robust” and noted only that the “unemployment rate has remained low.”
However, Chairman Jerome Powell, in his post-meeting news conference, noted the labor market “remains extremely tight” and is still “out of balance.” As of December, there were about 11 million job openings, or just shy of two for every available worker. “Today’s report is an echo of 2022′s surprisingly resilient job market, beating back recession fears,” said Daniel Zhao, lead economist for job review site Glassdoor. “The Fed has a New Year’s resolution to cool down the labor market, and so far, the labor market is pushing back.” Though Fed officials have expressed their intention to keep rates elevated for as long as it takes to bring down inflation, markets are betting the central bank starts cutting before the end of 2023. Traders increased their bets that the Fed would approve a quarter percentage point interest rate hike at its March meeting, with the probability rising to 94.5%, according to CME Group data.
The Fed is hoping to engineer a “soft landing” for an economy that is pressured by inflation and geopolitical factors that held back growth in 2022. Most economists still expect this year to see at least a shallow recession, though the labor market’s resilience could cause some rethinking of that. “Our base case is still recession likely toward the latter part of the year,” said Vanguard senior economist Andrew Patterson. “One report is not indicative of a trend, but certainly if we continue to see upside surprises, our baseline is up for discussion. This does increase the marginal probability of a soft landing.”
People are having to work. Employers increased pay because no one wanted to work.
It’s balancing out now.
Maybe someone can explain to me how unemployment can be at a 50-year low, while the "labor force participation rate" is only 62.4%.
They measure different things. Unemployment measures show many people are looking for work. The participation measures those that aren’t, basically.
I’m pleased by these strong numbers, since I’m in the market again.
B L S
* Bull
* Lobbying
* “Statistics”
I’m not sure I’m ready to assume the labor department is more accurate than ADP.
The unemployment rate is the percentage of the people who are participating in the labor force, but are not currently working. The BLS definition is that they have done anything at all to find a job in the past four weeks - just thinking it would be nice to have a job doesn’t count.
The bulk of the non-participants are probably women taking care of children at home.
Someone needs first to explain to you what the labor force participation rate is, right?
Just before the SOU address. Curious.
The figures always come out at this time of the month.
Because something is wrong with the BLS model. ADP added only 100k jobs.
Yeah, right. Liars.
I know, but could the figures be manipulated before the SOU and then corrected afterwards?
People HAVE to go back to work; the Government Gravy has done dried up! ;)
NOTE: It’s nothing Brandon has done, specifically.
This is just more crap from the Brandon Administration’s Feddies and their “media” toads who wanted to provide FJB a MAJOR Talking Point for his SOTU Show and Flea Circus. I wouldn’t get too excited or put too much stock in this crap. Mostly just manipulated figures wrapped up in far left lies. The Indian and Paki fart checkers wouldn’t dare try to touch this stuff.
More like “cooking the books”, I’d say.
If they’re 90% low paying & part time jobs...so what.
BLS and ADP measure different things and they both use sampling.
So both of them are probably wrong.
add those numbers and there’s no accounting for about 200,000 jobs.
“but could the figures be manipulated before the SOU and then corrected afterwards?”
They’re manipulated every month and later revised - usually downward.
Mark your calendar. ;)
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