Natalia Chi
Employers added a staggering 517,000 jobs in January. Increase in layoffs The tech industry and the Federal Reserve’s coordinated pressure to slow economic growth.
figure, release The Labor Department’s announcement on Friday far exceeded economists’ expectations that about 185,000 jobs would be added in January.
The national unemployment rate fell to 3.4%, the lowest level since 1969.
“January’s 517,000 nonfarm payroll gain comes at a time when most leading indicators of a recession are flashing red,” said Andrew Hunter, senior US economist at Capital Economics. Regardless, it means the economy is clearly not as close to recession as we thought.” in the report.
The government also revised its estimates for 2022 to show that the economy has added 568,000 more jobs than originally estimated.
The leisure and hospitality sector led the January employment gains, adding 128,000 jobs. This was followed by 82,000 in professional and business services and 79,000 in health care. The increase in labor costs was offset by a large increase in government jobs. This is partly due to the end of the strike at the University of California. 48,000 quit their jobs.
Employment in the information sector, which includes many technology companies, fell by 5,000, the same as in December. Many large tech companies are cutting jobs, with job cuts at Amazon, Alphabet, Meta, and Microsoft in the spotlight.
“We are still in a very strong and tight labor market, demand for workers is still high,” Morning Consult chief economist John Lia told CBS Moneywatch before the job numbers were released. Mama,” he said.
“The technology sector plays a very large role in driving productivity and corporate profits, but it remains a fairly small share of total employment,” he added. “For all these people who have been laid off, many of them have been rehired and reabsorbed elsewhere.”
Decline in wage growth
Stock futures fell with blockbuster numbers. Dow futures fell 0.5% and the S&P 500 fell 1%. Technology-heavy Nasdaq futures fell 1.8% in after-hours trading after his three tech leaders — Apple, Amazon and Alphabet — posted lackluster quarterly results after Thursday’s close.
Wall Street worries that overly strong job growth will force the Federal Reserve to push up interest rates, which will hurt stocks. But the Fed may take comfort in numbers that show wage growth slowed in January, with average wages rising at an annual rate of 4.4%.
Nick Bunker, head of economic research at Indeed Hearing Lab, said in an e-mail: “Today’s report presents a torrent of questions about what the Federal Reserve should think about the relationship between the labor market and inflation. It will ignite the debate,” he said. “If central banks think that low unemployment will inevitably boost wage growth and future inflation, this strong report may darken the economic outlook. The odds are the economy can avoid an increase in recession if it’s encouraged by slowing wage growth.”
