The economy crushed expectations in January and added 467,000 jobs, a surprising and encouraging sign that the labor market pulled through the omicron surge relatively unscathed.
The job gains for the past two months were also revised up by 710,000, the Bureau of Labor Statistics reported Friday, meaning that what had previously seemed like lackluster growth throughout the early winter was in fact robust.
The growth is particularly welcome news considering that it occurred despite the headwinds presented by the omicron variant, which suppressed commerce and kept millions of workers sick at home and technically unemployed.
“This was certainly not the downside surprise in payrolls that many were braced for. Quite the contrary,” said Mark Hamrick, senior economic analyst at Bankrate. “Between the pick-up in wages, an improvement in labor force participation, and a much better-than-expected jump in employment, including upward revisions in previous months, this is a strong report. This is good news for workers and a sign that the economy is powering through the omicron wave.”
Friday’s report showed an increase in the labor force participation rate, which generated an uptick in the unemployment rate to 4%.
Economists feared that surging cases of the omicron variant of COVID-19 would put a major damper on January’s report, given that people out sick without pay are counted among the unemployed, even though they still have jobs. The White House warned earlier this week that the report could be disappointing for that reason.
RECORD NUMBER OF SMALL BUSINESSES BOOSTED WAGES LAST MONTH AMID LABOR SCARCITY
Friday’s report found that 3.6 million were out of work because of illness, about double what the norm was throughout the pandemic.
Cases of the new variant peaked in mid-January after spiking over the holidays. While the strain is more contagious than previous iterations of the virus, it is also believed to be less deadly. Still, the large volume of people calling in sick resulted in supply chain disruptions and in companies implementing renewed coronavirus-prevention policies, such as remote work.
New cases are down 49% from two weeks ago, and hospitalizations are down 16%, although deaths are up 35%.
Even with the surge, jobless claims, which are a more forward-looking indicator, have been less than expected — more positive news for the country’s recovery.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
While the unemployment rate is below 4% and inching downward toward its pre-pandemic low of 3.5%, the economy is still millions of jobs short of where it was prior to the start of the pandemic.
Still, inflation has soared in recent months. In December, inflation was 5.8%, as measured by the Personal Consumption Expenditures index, far above the Federal Reserve’s 2% goal. The central bank has moved quickly in recent weeks to try to tighten monetary policy to curb inflation.
The Fed has held its interest rate target near zero during the pandemic to try to encourage spending. Investors now expect that the Fed will hike rates five or six times this year.
