Despite the inconvenience created by the Omicron strain of the coronavirus, the United States had excellent hiring last month.
According to the Labor Department, employers created 467,000 new positions. That was significantly better than the predictions of the analysts.
The unemployment rate increased slightly from 3.9 percent in December to 4 percent in January, although this was attributable to an increase in the number of persons looking for work.
Analysts predict that the strong job growth will increase the pressure on the Federal Reserve to hike interest rates next month, as the economy continues to grow.
The hiring projections in the monthly survey were also raised upward for December, adding fresh evidence to those who believe the economy will continue to grow even when officials unwind stimulus programmes put in place at the outset of the recession in 2020.
Brian Coulton, chief economist at Fitch Ratings, described the development as a “huge positive surprise.” “It demonstrates that each succeeding wave of the virus has a lower and smaller influence on activity and labour demand,” says the study’s lead author.
Jerome Powell, the chairman of the Federal Reserve, has stated that the bank is considering raising interest rates next month, which would be the first increase since 2018. The move is designed to aid in the containment of price increases by reducing demand through higher borrowing costs.
There is increasing pressure on the central bank to keep inflation under control, which is rising at the fastest rate in over 40 years. In the United Kingdom, the Bank of England has already hiked interest rates twice in the last three months, according to the media.
Moreover, according to the most recent jobs data, the average hourly salary has climbed by 5.7 percent over the last 12 months, marking a significant acceleration from the meagre growth experienced in prior years. The increase, on the other hand, does not keep up with the rapid rate of price increases that are affecting the economy.
Despite this, there are hints that wage increases are helping to entice people back into the labour market. For the first time since the epidemic began, the proportion of persons working or searching for job surpassed 62 percent in the month of December.
Women’s participation has increased, particularly in recent months, as schools and nurseries have reopened after a long winter break.
Restaurants and bars contributed to the increase in hiring in the United States in January. Retailers, warehouses, and transportation companies all increased their workforces.
The report, on the other hand, revealed that Omicron had a negative impact. Approximately six million people reported that they were unable to work or that their working hours were reduced as a result of the epidemic, nearly double the number reported the month before.