MONEY & BUSINESS: US payrolls surge by 353,000 in January — nearly doubling forecasts
US employers added a whopping 353,000 jobs in January — blowing past economists’ forecasts and confounding fears of a slowdown.
The blockbuster figure is nearly double the 185,000 jobs economists expected — and marks a surge from the higher-than-anticipated 216,000 jobs added in December and 199,000 increase in November.
The Labor Department said Friday that employment growth was strongest among professional and business services, which saw a gain of 74,000 in January — considerably higher than the average monthly increase of 14,000.
Healthcare, retail, and social assistance jobs also saw an increase, while employment across the mining and oil sectors decreased.
The unemployment rate remained steady at 3.7% in January for the third month in a row. The reading was a tick under the 3.8% that economists were forecasting.
Average hourly earnings, a key measure of inflation, rose by 19 cents, to $34.55.
“So much for imminent recession fears,” said Mark Hamrick, the senior economic analyst at Bankrate, noting that “the US economy has continued a surprisingly-robust, sustained recovery after the pandemic.”
Fed Chair Jerome Powell also shot down Wall Street’s hopes that the first of three highly-anticipated rate cuts could come in March.
“I don’t think it’s likely the committee will reach a level of confidence by the time of the March meeting” to lower rates, “but that’s to be seen,” Powell said in a closely-watched press conference following the policy meeting.
Central bankers have struggled to spur enough of an economic slowdown to tamp down inflation. The latest Consumer Price Index — which tracks changes in the costs of everyday goods and services — showed that inflation rose a hotter-than-expected 3.4% in December.
January’s CPI reading is set to be released on Feb. 13.
Powell has attributed stubbornly high inflation to a resilient labor market.
“It will likely be appropriate to begin dialing back policy restraint at some point this year, but the economy has surprised forecasters in many ways since the pandemic, and ongoing progress toward our 2% inflation objective is not assured,” Powell said on Wednesday.
The number of openings was up from November’s 8.9 million, which itself was revised up in Tuesday’s report from the government.
Job openings have gradually but steadily declined since peaking at a record 12 million in March 2022 — but they remain at historically high levels. Before 2021, monthly openings had never topped 8 million.
Layoffs still rose in December, though the number of Americans who quit their jobs dipped to the lowest level since January 2021 — a sign of wavering confidence in their ability to find a better position.
As RedBalloon CEO Andrew Crapuchettes put it, “the labor market churn is in full effect.”
“While many large corporations downsized their labor force in January, other businesses quickly snapped up those employees, as reflected in the strong jobs report,” Crapuchettes added.
Chipotle has recently sweetened its benefits for its workers — a move the California-based said it hopes will attract and retain Gen Z workers as it looks to increase its headcount by 19,000 for the upcoming “burrito season.”
The fast-casual chain — which has more than 3,300 locations nationwide — said it would match up to 4% of an employee’s salary through contributions to their 401(k) if they make their student loan payments so that “employees who qualify no longer have to choose between paying off student debt or saving for retirement.”
The new hires will also be offered access to Cred.ai, which has been dubbed “the Tesla of banking” because of its high-tech Visa credit card that is designed to limit spending so that customers don’t fall into debt.
In addition, Chipotle is partnering with SoFi to give employees access to a “financial well-being education platform” that includes “an assessment of current financial outlook” as well as “suggestions and tools to improve.”
Along with the financial perks, the company — whose workforce is more than 73% comprised of Gen Z-ers, who are currently aged 11 to 26 — is also giving employees six free sessions with a licensed counselor or mental health coach.
The new benefits are all part of Chipotle’s plan to beef up hiring during its busy season, from March to May.