Employment in the U.S. increased by much more than expected in the month of January, according to a closely watched report released by the Labor Department on Friday.
The Labor Department said employment jumped by 467,000 jobs in January compared to economist estimates for an increase of 150,000 jobs.
The report also showed the increase in employment in December was upwardly revised to 510,000 jobs compared to the previously reported 199,000 jobs.
“The 467,000 gain in non-farm payrolls in January is even stronger than it looks, as it came despite the spike in absenteeism driven by the Omicron virus wave and was accompanied by significant upward revisions to the gains over the preceding couple of months,” said Andrew Hunter, Senior U.S. Economist at Capital Economics.
He added, “That will inevitably further fuel expectations of the Fed unleashing a larger 50bp hike at the March meeting, although we still think that a sharp slowdown in economic growth in the first quarter will give officials second thoughts.”
The Labor Department said the stronger than expected job growth reflected increases in employment in the leisure and hospitality, professional and business services, retail trade, and transportation and warehousing sectors.
The increase in employment in the leisure and hospitality sector reported by the Labor Department is in stark contrast to the steep drop in employment reported by payroll processor ADP.
Meanwhile, the Labor Department said the unemployment rate inched up to 4.0 percent in January from 3.9 percent in December. Economists had expected the unemployment rate to hold unchanged.
The uptick in the unemployment rate came as the labor force increased by 163,687 persons, while the household measure of employment rose by 157,174 persons.
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