The US economy added 517,000 jobs in the month of January, showing that the job market is not yet ready to cool down, according to new data released Friday by the Bureau of Labor Statistics.
In addition, the unemployment rate fell from 3.5% to 3.4%, reaching levels not seen since before Neil Armstrong stepped on the moon.
Economists expected only 185,000 jobs to be added last month, according to Refinitiv consensus estimates, so this Friday’s report has shocked markets and specialists.
“With 517,000 new jobs added in January 2023 and an unemployment rate of 3.4%, this is a very successful report that shows that the labor market is more like a bullet train,” Becky Frankiewicz, president and chief business officer of ManpowerGroup, said on Friday.
The impact of the report may complicate the Federal Reserve, which has been trying to rein in high inflation with higher interest rates, said Seema Shah, chief global strategist at Principal Asset Management.
“This is a red hot job market; no one would have expected a number as monstrous as this,” Shah said in a statement.
Fed Chairman Jerome Powell has been trying to rein in high inflation with higher interest rates, but now “wonders why he didn’t roll back the easing of financial conditions,” Shah said in a note Friday.
“The market is going to go through a roller coaster trying to decide if this is good news or bad news. For now, however, it appears that the US economy is doing well,” she said.