Hiring surged in January as U.S. employers added 517,000 new jobs and the unemployment rate declined to 3.4% – the lowest it has been since May of 1969, the federal government announced Friday.
The stock market fell in early trading after the monthly jobs report was released. Investors are concerned the unexpected burst in hiring may accelerate the Federal Reserve Board’s ongoing efforts to curb inflation by cooling down the economy with interest rate increases.
The Fed raised rates a quarter of a percentage point Wednesday, a lower increase than the half-point rise in December and the 0.75-point increase in November. The Fed said earlier this week that it would continue to monitor a wide range of data, including labor market conditions, in making future decisions on monetary policy as it seeks to reduce inflation from 6.5% to the board’s target goal of 2%.
The January Employment Situation Report, released by the U.S. Bureau of Labor Statistics (BLS), said the monthly gain of 517,000 nonfarm jobs exceed the 2022 monthly average of 401,000. Job growth was widespread in January, led by gains in leisure and hospitality (+128,000), professional and business services (+82,000), and healthcare (+58,000).
Employment gains also occurred in retail (+30,000), construction (+25,000), transportation and warehousing (+23,000), manufacturing (+19,000) and other industries.
The information sector, which includes tech workers, lost 5,000 jobs in January, on top of the 5,000 jobs that sector lost in December, the report said.
Public sector employment also grew by 74,000 in January, but half of those gains reflected the return to work of some 35,000 public university workers who had been on strike in California.
In January, nationwide average hourly earnings for all employees on private nonfarm payrolls rose 0.3% to $33.03. Over the past 12 months, average hourly earnings have increased by 4.4%.
BLS also revised its preliminary jobs numbers for November and December upward by 71,000. The change in total nonfarm payroll employment for November was revised upward by 34,000 from +256,000 to +290,000, and the change for December was revised up by 37,000, from +223,000 to +260,000.