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The U.S. labor market started 2024 with the strongest jobs report in recent history by adding 353,000 jobs in January, far above the Dow Jones estimate of 185,000. In addition, November and December job gains were revised, adding a combined 126,000 more jobs to the 2023 year-end total. Job growth was widespread across sectors in January (e.g., health care, retail trade, government, social assistance, and manufacturing), showing a healthy market on solid ground. The unemployment rate remained at 3.7% for the 3rd consecutive month and under 4% for the 24th consecutive month.

Payroll employment ended strong in 2023, with a final average of 255,000 jobs added monthly.

The Numbers*:

The U.S. economy added 353,000 jobs. Job gains occurred in professional and business services, health care, retail trade, and social assistance. Job declines were seen in mining, quarrying, and the oil and gas extraction industries.

The unemployment rate held steady at 3.7% for the third month. It was below the estimate of 3.8%. The number of unemployed people changed little, at 6.1M, including 1.3M long-term unemployed.

The labor force participation rate was unchanged at 62.5% in January. The number of job openings rose to 9 million and the job openings rate was 5.4%.

• Average hourly earnings rose another 0.6% (+19 cents), double what economists estimated.
• Over the last 12 months, average hourly earnings have increased by 4.5%.
• Average weekly hours worked was reduced by 0.2 hours to 34.1 hours per week.
• The number of hires was up slightly to 5.6M. Total separations also increased slightly to 5.4M.
• Within the separations, quits decreased slightly to 3.4M, and layoffs and discharges (1.6M) increased slightly.

The revisions for December job gains were increased by 117,000 from +216,000 to + 333,000 and November gains were also revised by 9,000 from +173,000 to +182,000.

Industry Trends:

Interesting Facts:

The U.S. economy grew faster (2.5%) than any other large, advanced economy last year, and it looks on track to do the same in 2024. The labor force was a key driving factor. Other growing economies included Japan at +1.9% and Canada at +1.1%.

Wage growth and the average hours worked are the numbers to watch as key measures for inflation, with wages increasing and hours worked slightly decreasing this month.

Core inflation, as measured by personal consumption expenditures, was down to 2.9% in December. However, the Atlanta Fed’s “sticky” inflation number, which focuses on housing, insurance and medical costs was at 4.6% on a 12-month basis in December.