Economists had predicted dramatic slump in job growth but labor department figures much better than expected
Last modified on Fri 4 Feb 2022 08.57 EST
The US economy appeared to shake off the Omicron variant in January as employers added 467,000 new jobs, the labor department reported on Friday.
Data for the report was collected in mid-January when the Omicron variant was at its peak in the US and while some economists – and the White House – had predicted a dramatic slump in jobs growth, the number of jobs added was far better than expected.
The unemployment rate remained low overall at 4%, down from a pandemic high of 14.8% in April 2020 but up from 3.9% in December.
The news comes at a sensitive time for the Biden administration and the Federal Reserve. The US economy is wrestling with soaring inflation and signs of an economic slowdown after last year’s strong rebound.
Earlier this week, in a highly unusual move, the White House sought to manage expectations ahead of the latest jobs figure release.
White House officials cautioned that Friday’s jobs report could be “confusing” because of the timing of the survey. Covid infections have fallen sharply across the US since the report was compiled.
The government report follows on from a survey conducted by ADP, the US’s largest private payroll supplier, which reported that companies cut jobs in January for the first time in over a year. Payrolls fell by 301,000 for the month with more than half the losses coming from the pandemic-sensitive leisure and hospitality industries.
“The labor market recovery took a step back at the start of 2022 due to the effect of the Omicron variant and its significant, though likely temporary, impact to job growth,” said Nela Richardson, ADP’s chief economist.
There were signs that the jobs market is still recovering ahead of Friday’s report. On Thursday, the labor department reported that new unemployment claims fell to 238,000 for the final week in January, dropping 23,000 from the week prior, a second straight week of falls.
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