US Job Market Heats Up Further... 520,000 Jobs Surge in January

U.S. Department of Labor January Employment Report Released

[Asia Economy Reporter Jeong Hyunjin] The U.S. labor market remains hot despite the Federal Reserve's (Fed) consecutive interest rate hikes. Last month, nonfarm payrolls nearly tripled market expectations, and the unemployment rate actually fell compared to the previous month.

[Image source=AP Yonhap News]

According to the employment report released by the U.S. Department of Labor on the 3rd (local time), nonfarm payrolls increased by 517,000 last month. This is double the previous month's increase (260,000) and nearly three times the market forecast of 185,000. It is the largest increase since August last year.

The unemployment rate last month was 3.4%, down from 3.5% in December last year. The initial forecast for January's unemployment rate was 3.6%, expected to rise slightly from the previous month, but it instead decreased. The labor force participation rate rose slightly to 62.4% from 62.3% the previous month.

However, wage growth somewhat slowed. The average hourly wage in January rose 0.3% month-over-month and 4.4% year-over-year. Considering that the increases were 0.4% and 4.8% respectively in December last year, the growth rate has somewhat declined.

The Fed has been trying to cool the overheated labor market through interest rate hikes and other measures. Nevertheless, with the labor market showing such strength, it is likely that the tightening mode will be maintained for the time being.

On the 1st, Fed Chair Jerome Powell said at a press conference following the Federal Open Market Committee (FOMC) regular meeting that although inflation is slowing, it is still in the early stages, and "the labor market remains extremely tight." He stated, "With the lowest unemployment rate in 50 years, very high job openings, and high wage growth, the labor market remains extremely tight. Despite a slowdown in job growth and some easing in nominal wage growth over the past year, the labor market continues to be out of balance."