The U.S. economy added far more jobs than expected in January, boosted by a jump in leisure and hospitality employment.
That one service sector saw an increase of 128,000 jobs in the month, led by 99,000 positions at restaurants and bars alone, the Bureau of Labor Statistics said in a report released Friday. Employment at hotels continued to rise, edging up 15,000 for the month. Still, employment in leisure and hospitality remained well below pre-Covid pandemic levels.
related investing news
The second-largest gain was in professional and business services employment, which climbed by 82,000. Professional, scientific and technical services led the increase.
Government employment rose by 74,000 in January, led by state government education jobs (35,000), which reflected the return of university workers after a strike.
The distribution of hiring was broad. Health care added 58,000 jobs in January, while employment in the retail trade rose by 30,000.
Overall, nonfarm payrolls increased by 517,000 for January, almost three times the Dow Jones estimate of 187,000. The unemployment rate fell to 3.4%, the lowest since May 1969.
“It is encouraging to see a strong jobs report amid recession concerns and continued layoffs in the tech industry,” said Steve Rick, chief economist at CUNA Mutual Group. “Still, we will continue to pay particular attention to factors that could impact the jobs market, such as further interest rate hikes, inflation and geopolitical issues.”
The surprise surge in payroll creation came despite the Federal Reserve’s aggressive monetary tightening campaign, which brought the central bank’s benchmark interest rate this week to the highest level since 2007.