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Market Analysis
NFP Data Shows 353k US Jobs Added in January, 185k Expected
The US economy added 353,000 jobs in January, smashing the 185,000 projected by economists.
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The US job market saw much stronger-than-anticipated growth in January, demonstrating again its role as a key driver of the economy’s expansion. Markets saw a mixed reaction following the release, with US equities and bond yields rising while gold prices edging lower.
The US Added 353,000 Jobs in January
According to the Bureau of Labor Statistics, nonfarm payrolls increased by 353,000 in January, surpassing the Dow Jones estimate of 185,000. The unemployment rate remained steady at 3.7%, compared to the expected 3.8%.
In January, various sectors contributed to job growth, with professional and business services leading the way with 74,000 new positions. Other significant contributors included healthcare (70,000), retail trade (45,000), government (36,000), social assistance (30,000), and manufacturing (23,000).
“Retail trade employment increased by 45,000 in January but has shown little net growth since early 2023. Over the month, general merchandise retailers added 24,000 jobs, while electronics and appliance retailers lost 3,000 jobs.”
– the report noted.
Wage growth also strengthened in January, as average hourly earnings rose by 0.6%, double the monthly estimate. Year-over-year, wages saw a 4.5% increase, surpassing the forecasted 4.1%. This wage growth occurred despite a slight decline in average hours worked, which decreased to 34.1 hours, a decrease of 0.2 hours.
Also, the report revealed positive revisions for December results, with job gains reaching 333,000, up by 117,000 from the initial estimate. November’s numbers were also adjusted upwards to 182,000, an increase of 9,000 from the previous estimate.
How Did the Market React to the Report?
US stock futures climbed marginally on Friday after a robust jobs report and earnings reports of three Big Tech giants. Specifically, the S&P 500 futures rose just 0.02% to 4,929, while Nasdaq-100 futures added 0.3% to 17,497.
Meanwhile, Treasury bond yields increased on the day, with the 10-year and 2-year notes climbing to 4% and 4.38%. The dollar index rose 0.7% to 103.75, while spot gold prices slipped 1.1% to $2,031.
Would the Federal Reserve take unexpected measures if the US economy continues adding jobs quickly? Let us know in the comments below.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
