WASHINGTON – US employers added 467,000 jobs in January in a surprise hiring surge, signaling the resilience of the economy in the face of a surge in infections caused by the omicron variant of Covid-19 last month.
For its part, the United States government, in its report, revised upward its estimate of job growth for November and December, gaining a total of 709,000. They also reported that the unemployment rate rose from 3.9% to a still low 4%, mainly because more people started looking for work and not everyone immediately found one.
In addition, January’s strong hiring growth, which fell short of expectations of a modest increase, demonstrated the commitment of many employers to hire even as the pandemic rages on. Companies appear to have seen the omicron option as a temporary impact on the economy and remain confident in long-term growth.
“Employers assumed the omicron option would be painful, but in the short term, so they didn’t change their hiring plans,” said Mathieu Stevenson, CEO of Snagajob, a job listing site focused on hourly workers.
At the same time, the scale of job growth points to an economy in which high levels of hiring and spending, combined with tight supply, are accelerating inflation, killing wage growth and increasing pressure on households. These factors are likely to give the Federal Reserve some wiggle room to raise interest rates, perhaps even faster than expected, to calm inflation. The Fed has already said it will start raising rates in March and may do so again at its next meeting in May.
Equity futures immediately fell amid expectations that the Fed could speed up its efforts to tighten credit, which could dampen the economy before partially recovering.
Daniel Zhao, senior economist at job site Glassdoor, said healthy hiring numbers not just in January, but also in November and December, are a sign that last month’s growth was more than just a flicker.
“This is a real trend and job growth has been faster than we thought,” Zhao added.
A higher proportion of Americans are also working or looking for work, a trend that makes it easier for companies to find workers, according to the report. This may suggest that concerns about long-term labor shortages are exaggerated, at least in some quarters.
“There are workers, it just takes time to reintegrate them into the workforce,” the economist said.