Nonfarm Employment Soars with 353,000 New Jobs Added

Overview of Employment Situation

January 2024 marked a significant increase in nonfarm payroll employment, with a total rise of 353,000 jobs. Despite this boost, the unemployment rate held steady at 3.7 percent. Notable job growth was observed in professional and business services, health care, retail trade, and social assistance, while a decline occurred in the mining, quarrying, and oil and gas extraction industries.

Ahead of the report, traders were looking for the Non-Farm Employment Change to come in at 187K. The Unemployment Rate was forecast at 3.7% and Average Hourly Earnings at 0.6%.

Steady Unemployment Rate

January sustained an unemployment rate of 3.7 percent, consistent for three consecutive months. The number of unemployed individuals remained largely unchanged at around 6.1 million. The unemployment rates across various worker groups, including adult men, women, teenagers, and major racial groups, showed minimal or no alteration.

Professional and business services led the way with 74,000 new jobs, significantly higher than the average monthly increase in 2023. Health care added 70,000 positions, with notable gains in ambulatory health care services and hospitals. Retail trade saw an increase of 45,000 jobs, though its overall growth has been limited since early 2023. Social assistance also experienced growth, particularly in individual and family services. Manufacturing edged up slightly, and government employment continued its upward trend.

Hourly Earnings and Workweek Duration

Average hourly earnings for all private nonfarm employees rose by 19 cents to $34.55, marking a 4.5 percent increase over the past year. The average workweek, however, decreased slightly to 34.1 hours.

Short-Term Market Forecast

Given the robust job growth in key sectors and the steady unemployment rate, the outlook appears cautiously optimistic. The consistent increase in average hourly earnings suggests a resilient labor market. The short-term forecast for the labor market remains bullish, reflecting ongoing recovery and growth across various sectors.