Gwengoat/Getty Images; Jenny Chang-Rodriguez/BI
- New data out Friday showed the US started 2024 with 353,000 nonfarm payrolls added in January.
- That far surpasses the forecasted job growth.
- The unemployment rate was 3.7% in January, like it was in December.
January was a solid month for job growth in the US.
According to a news release from the Bureau of Labor Statistics on Friday, there were 353,000 nonfarm payrolls added that month. That far exceeds the 187,000 job gain expected.
December's growth was revised from 216,000 to 333,000.
Leisure and hospitality saw job growth of 11,000 in January, retail trade saw job growth of around 45,000, and professional and business services saw a gain of 74,000. The news release on Friday noted that the increase by 74,000, was "considerably higher than the average monthly increase of 14,000 jobs in 2023."
The mining and logging industry saw a decline in employment of 6,000 at the start of 2024.
"Employment in the mining, quarrying, and oil and gas extraction industry declined by 5,000 in January, following little net change in 2023," Friday's news release from BLS stated.
The unemployment rate was 3.7% in January after ending 2023 with a rate of 3.7% for both November and December. The expected rate for January was 3.8%.
The overall labor force participation rate, which includes not only those working but "actively looking for work," remained at 62.5%.
Wage growth was fairly strong in January. Average hourly earnings rose by 4.5% year over year in January, which surpasses the last few 4.3% year-over-year increases. These earnings also increased by 0.6% from December to January — or from $34.36 to $34.55.
An earlier data release from the Bureau of Labor Statistics on Tuesday showed the layoffs and discharges rate was 1.0% in December. That same news release showed there were 9.0 million job openings that month. That's slightly higher than the level for November, but it's not at the level seen during 2022 or even the monthly level seen in the first half of 2023.
It's still early in the year, but job seekers and unemployed workers hoping to get a job may be finding it difficult to have a successful job search.
"The labor market is likely to be cooler in 2024, which means it probably will be harder to find a job this year than last year," Daniel Zhao, lead economist for jobs search platform Glassdoor, previously told Business Insider.
While Friday's new release showed how average hourly earnings data looked, another news release this week showed how compensation costs for workers fared.
"Employment Cost Index data suggests that employers are feeling less pressure to raise pay to attract and retain workers as wage growth slowed further in the fourth quarter," Cory Stahle, an economist at the Indeed Hiring Lab, said. "Despite 2023 being a year of gradual moderation in wage growth, rates still remain above pre-pandemic standards as a result of continued demand for workers and low unemployment."
The Federal Reserve will be watching labor markets closely. This week, the Fed held rates steady for the fourth meeting in a row. While rate hikes have been paused, people do expect cuts later on this year.
"The Fed is certainly pushing back on the notion of a March interest rate cut, dashing investors' hopes again, but keeping options open and remaining non-committal as a central bank does," Greg McBride, the chief financial analyst for Bankrate, said.
Still, the hot job market may mean the Fed waits a bit longer before cutting rates.
This is a developing story. Please check back for updates.