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The labor market continues to impress with the 40th straight month of job growth and an unemployment rate that ticked lower. Job gains in Q1 2024 averaged 276,000 per month, compared to the Q4 2023 average of 212,000 jobs added each month. The jobless rate fell as more people entered the workforce. Gains were broad-based. Wages, an important inflation metric, increased slightly, up 0.3% to 4.1% year-over-year (YOY). It was the lowest annual gain since June 2021.

February marked the 39th straight month of job growth, reflecting an exceptionally strong recovery from the widespread job losses during the pandemic. Unemployment rose to 3.9%, a two-year high, but remained under 4% for the 25th consecutive month. This is the longest stretch of unemployment below 4% since the 1960s. While we have a strong labor market, fears that it was getting too hot again were somewhat allayed this month with the rise in unemployment, the revision of the January and December job numbers, and a weak rise in wages.

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.

In 2023, market growth continued – December marked the 36th consecutive month of job creation – but slowed. There were 2.7 million jobs added in 2023 vs. 4.8 million in 2022. The U.S. labor market ended the year strong, with 216,000 jobs added in December, far above the Dow Jones estimate of 170,000. Average hourly earnings rose 4.1% from 2022, higher than the 3.9% forecast. As we head into 2024, the market continues to look strong. Job openings still significantly outnumber the amount of people looking for a job.