In another surprise that will confound the pessimists who see a looming recession, the U.S. added 467,000 jobs in January and hiring was much stronger at the end of 2021 than originally reported.
The U.S. added 510,000 jobs in December instead of 199,000. And employment rose by 647,000 in November compared to the prior estimate of 249,000. That’s 709,000 more jobs added to nonfarm payrolls in the past two months.
‘Total nonfarm payroll employment rose by 467,000 in January, and the unemployment rate was little changed at 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment growth continued in leisure and hospitality, in professional and business services, in retail trade, and in transportation and warehousing.”
It's easy to see why. Average hourly wages are rising at 5.7 percent, the fastest in decades, luring workers back into the employment fold. This is especially true in the Leisure and hospitality, Education & healthcare, Transportation, and Retail sectors where 295,000 jobs were added.
So, companies apparently ramped up hiring just as effects of the Omicron variant are subsiding.
Actually, this hiring surge shouldn’t be such a surprise, since GDP grew at 5.7 percent last year, a 40-year high. The economy is running red-hot, but more employees returning to work will begin to bring down inflation.
In fact, could it be that the Omicron variant is subsiding faster than expected? The U.S. is reporting an average of 354,399 new COVID-19 infections a day, sharply down from the more than 700,000 in mid-January, according to a Reuters analysis of official data.
It looks like the Omicron variant has actually spurred higher growth, as I said last week. Fourth quarter GDP growth exploded to 6.9 percent, surpassing most estimates of 5 to 6 percent, as GDP got a big lift at the end of last year from businesses scrambling to restock empty shelves in time for the holiday season and warehouses hit by disruptions during the pandemic.
This could be a surprising year, and the beginning of a surprising decade. There hasn’t been this much support for governments and working folk for decades, maybe even since the New Deal.
Harlan Green © 2021
Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen
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