The U.S. economy added 467,000 jobs in January, while the unemployment rate remained flat at 4.0%, according to the U.S. Bureau of Labor Statistics.
Most of the job growth was in leisure and hospitality, which includes restaurant, hotel and cruise line jobs. Of the 467,000 jobs added, 151,000 were in leisure and hospitality.
Other job categories seeing strong growth in January included professional and business services, retail, and transportation and warehousing.
The total number of unemployed persons stood at 6.5 million. That’s down 3.7 million compared with February 2020.
Prior to the pandemic, the unemployment rate was 3.5%.
After accounting for the annual adjustments to the population controls, the labor force participation rate increased slightly to 62.2%.
The average wage for non-farm employees increased by 23 cents to $31.63. Over the past 12 months, average hourly earnings have increased by 5.7%. In January, average hourly earnings of private-sector production and nonsupervisory employees rose by 17 cents to $26.92.
Odtea Kushi, deputy chief economist for First American, says the report signals a “strong start for labor market in 2022.”
“The first jobs report of 2022 outpaces consensus expectations as total non-farm payroll employment increased by 467,000 and December’s data was revised upward significantly,” Kushi says in a statement. “Even with this strong start to the year, 13 percent of the jobs lost in the pandemic have not been regained. If monthly gains continue at the January pace, we could return to the pre-COVID employment peak by August 2022.”
“The labor force participation rate ticked up to 62.2 percent in January,” Kushi says. “Still well below the pre-pandemic level, but it’s a positive sign to see some movement upward. Prime-age participation edged up slightly as well, but remains about a full percentage point below its pre-pandemic level.”
“Labor force participation rate is important because a labor market with low unemployment and low participation means many Americans are not participating in the economy or contributing to its growth,” Kushi adds. “A low unemployment rate and a high participation rate signals a healthy labor market.”
Kushi notes that employment in residential building construction increased by 3,600 in January.
This is “positive news for home builders and housing supply,” she says. “We need more homes built to relieve the supply-demand imbalance and in such a labor-intensive industry, more hammers means more homes.”
Kushi further notes that the “pace of growth for the average hourly earnings of production and non-supervisory employees in construction reached the highest level since 1982 at 5.8 percent year over year.”