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Fact Checked: January report shows 517,000 new jobs – Unemployment rate down to 3.4%

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Despite the Federal Reserve’s continuous trend of raising interest rates since last year, American companies created a total of 517,000 new jobs in January, a remarkably large increase and way over the estimates of most experts.

As a result of gains after the peak of COVID in 2020–22, the jobless rate decreased to 3.4 percent, a new half-century low. The epidemic first rocked the world’s financial markets, reshaped the U.S. economy’s geography by migrating away from coastal cities, and irrevocably changed the composition of its labor force.

Friday’s government data strengthened the case for a labor market that is durable, with low unemployment and rare but significant layoffs, mostly in the media and technology sectors.

Now, let’s look at the facts: Here are some of the actual insights stated in the report of the U.S. bureau of labor and statistics:

Job growth was widespread, led by gains in leisure and hospitality, professional and
business services, and health care. Employment also increased in government, partially
reflecting the return of workers from a strike.

Both the unemployment rate, at 3.4 percent, and the number of unemployed persons, at 5.7 million, changed little in January. The unemployment rate has shown little net movement since early 2022.

More specific data from the bureau of labor:

  • “In January, both the labor force participation rate, at 62.4 percent, and the employment- population ratio, at 60.2 percent, were unchanged after removing the effects of the annual adjustments to the population controls. These measures have shown little net change since early 2022 and remain below their pre-pandemic February 2020 levels.”
  • “The number of persons employed part time for economic reasons, at 4.1 million, was little changed in January. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full- time jobs.”
  • “Among those not in the labor force who wanted a job, the number of persons marginally attached to the labor force, at 1.4 million, changed little in January. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey…”
  • Government employment increased by 74,000 in January. Employment in state government education increased by 35,000, reflecting the return of university workers after a strike.

Following the release of the data, markets fell, with the Dow Jones Industrial Average falling by almost 200 points. Although beneficial to employees, companies’ constant need for labor has accelerated pay increases and raised inflation levels.

There may be some worries about whether inflation pressures will reduce more in the coming months in light of January’s employment growth, which substantially outpaced December’s 269,000 rise.

In an effort to control inflation, which peaked last year at a four-decade high but has subsequently dropped, the Fed has increased its benchmark rate eight times since March 2022.

Businesses are still looking for new employees while still clinging to the ones they already have. Aside from a few high-profile layoffs at major tech firms like Microsoft, Google, Amazon, and others, most workers are experiencing an unusual degree of job security even as many analysts predict a recession is on the horizon.

The economy generated a scorching average of 375,000 new employment each month for the entire year 2022. That pace was fast enough to have contributed to the 40-year-long worst round of severe inflation that Americans have been experiencing.

A tight labor market has a tendency to drive salaries up, which fuels inflation.

The sector with the most employment growth last month was leisure and hospitality, which added 128,000 new positions. Government added 84,000 new jobs, professional and commercial services 82,000, and health care 58,000.

The increase in wages last month was roughly 0.3 percent, and it has increased by 4.4 percent over the last year, as expected.

Jerome Powell, the chairman of the Federal Reserve, stated that the labor market is still “very tight” and “out of balance” during a meeting on Wednesday.

The Fed has recently changed course, attempting to control inflation while allowing the job market to slow, after focusing for years on low unemployment with a wider tolerance for price increases. Powell has cautioned American consumers that lowering prices will cause some damage to the economy.

President Biden said in remarks on Friday that he has no responsibility for the United States’ high inflation rates, noting that prices were rising when he took office.

Biden told reporters that he would only respond to inquiries about January’s employment statistics because “else you guys won’t cover it” if they asked him about the Chinese spy balloon that was spotted flying over Montana.

When questioned if he had any responsibility for the price increases that occurred under his president, he answered emphatically “no.” ‘It was already there when I got here, man.’

Independent Writer. Marketing and communications strategist for politicians, artists, public figures & corporate brands for more than 10 years. Contact: @alejandrosbasso (Twitter)
Escritor independiente. Consultor en marketing y comunicaciones de políticos, artistas, figuras públicas y marcas por más de 10 años. Contacto: @alejandrosbasso (Twitter)