Job growth in the United States accelerated in January due to strong economic performance and increased worker productivity, likely encouraging companies to hire more workers and avoid layoffs, a trend that may shield the economy from recession this year. The Labor Department's Bureau of Labor Statistics reported today, Friday, that non-farm jobs rose by 353,000 last month. The data for December was revised upwards, increasing job gains to 333,000 from the previously announced 216,000. Economists surveyed by Reuters had expected an increase of 180,000 jobs. Job growth remains well above the rate needed to keep pace with the growth of the working-age population, estimated at around 100,000 jobs per month.
On the other hand, the momentum of the labor market has slowed from its strong pace in 2022 due to the Federal Reserve's significant interest rate hikes. The average hourly wage rose by 0.6 percent last month after a 0.4 percent increase in December. Year-over-year, wages increased by 4.5 percent as of January. The annual rate of wage growth remains well above its average before the COVID-19 pandemic and the range of 3.0 to 3.5 percent that most policymakers view as consistent with the Federal Reserve's inflation target of two percent. The unemployment rate stood at 3.7 percent in January. The Federal Reserve kept interest rates unchanged on Wednesday, and Chair Jerome Powell told reporters that interest rates have peaked and will decrease in the coming months, reflecting the strength of the economy.
