• US added more than half a million jobs in January, exceeding consensus forecasts and notching the largest monthly increase in nonfarm payrolls since July.
• Revisions to growth over the last year represent the largest sign of strength in the labor market.
• Employment has now more than fully recovered in all major industry groups except Leisure & Hospitality and Government.
• Wage growth continues to decelerate, with private industry wages growing 5.1% over the year ending in Q4 and average hourly earnings for private-sector workers growing 4.4% over the year ending in January 2023.
• Unemployment rate has sunk to its lowest level since 1969 and prime-age employment rates remain just 0.4% below pre-pandemic peaks.
• Sectors that had demand pulled forward during the early pandemic—tech, transportation, warehousing, homebuilding, and manufacturing—are holding up better than previously thought.
• The share of working-age adults with a job is still slightly below the 80.6% notched just before COVID, significantly below the 81.9% achieved in the late 1990s.
• Comprehensive data on wages and benefits from the Employment Cost Index shows wage growth decelerating significantly over the last two quarters.
• Chair Powell and the FOMC acknowledged the start of disinflationary process at their meeting this week, stressing that they don’t believe they have done enough to contain inflation yet.
Published February 4, 2023
Visit Apricitas Economics to read Joseph Politano’s original post The US Labor Market Was Stronger Than We Thought
