Unemployment Rate Drops Further to 3.4%
Jobs Growth
After five months of seemingly slowing growth, job creation surged in January to reach 517,000 new positions, nearly double the previous month (after upward revisions of the originally published figures for both December and November).
Top Industries
Making the most gains during January were the leisure and hospitality sector, professional and business services, and healthcare.
Unemployment
The unemployment rate continued to slip lower, reaching 3.4% in January. This matches pre-pandemic levels and the lowest rate in more than 50 years.
Wages
Average hourly earnings again saw a monthly rise of 0.3%, contributing to an average annual increase of 4.4% over the past 12 months.
Work Week
The average work week in January rose to 34.7 hours.
Temporary Job Trends
Reversing the trend of the past two months. January saw hiring move into positive territory in the temporary help sector, with a gain of nearly 26,000 jobs.
What Does It All Mean?
Although the jobs outlook seemed uncertain at the end of 2022, accelerated growth in January bodes well for the new year. Continued jobs creation, including a spurt of hiring in the temporary help sector, reflects the sustained struggle by employers to plug significant holes to address ongoing skills gaps amid an unabated shortage of labor. This is in spite of recent headlines touting job layoffs in certain sectors.
An upswing in jobs creation signals a better economic picture than most business analysts have long painted. The Federal Reserve will likely continue its recent record of raising interest rates to put the brakes on rising inflation, but that may not slow activity in the labor market. Where does this leave employers?
Although it remains to be seen whether accelerated growth in an incredibly tight labor market will be enough to stem recession fears, employer focus on talent recruitment, engagement, and retention will likely intensify. Workers will continue to hold the upper hand in job selection and hiring negotiations, while employers remain under pressure to find innovative ways to source talent and attract the right candidates.
Sources: U.S. Bureau of Labor Statistics (BLS), ABC News, CNBC, Staffing Industry Analysts, American Staffing Association, National Federation of Independent Business, USA Today, Reuters, MarketWatch.
