Hickey Jobs Report Analysis January 2024

The U.S. economy vastly outdid market expectations by adding 353,000 new jobs in the first month of 2024, a figure that doubles the predictive numbers by many leading economists. Meanwhile, the nation’s unemployment rate remained at 3.7 percent for the third consecutive month. 

According to the latest U.S. Bureau of Labor Statistics Jobs Report, the largest job gains for January 2024 were seen in Health Care, Government, Manufacturing, Professional and Business Services, Social Assistance, and Retail Trade, among others. In another big market surprise, average hourly earnings for all employees on private nonfarm payrolls increased by 19 cents to $34.55, or 0.6 percent, resulting in a 4.5 percent increase over the past twelve months.

To dig deeper on the key labor market indicators, the unemployment rate has now been below four percent for 24 straight months. The U.S. economy has not seen that level of unemployment for a two-year period since 1967. A marked change from the jobless rate spike to 14.8 percent seen in April 2020 following the onset of COVID-19. Remaining under four percent is also a differing trend than was expected by Federal Reserve, which had forecasted the key trend to be closer to 4.5 percent.  

We’re tracking these latest updates, along with labor force participation rates, wage shifts, and inflationary concerns – here are the five things you need to know from the latest U.S. Jobs Report:

1. Obliterating projections, U.S. employers added 353,000 workers in the first month of 2024. With these surprising figures, further buoyed with a ratchet up of the previous estimates for December 2023, many now believe the Federal Reserve will be hesitant for a rate cut in March.

2. The Government and Health Care sectors were once again leaders in job growth, but were also joined by Professional and Business Services, Retail Trade, and Manufacturing, among others.

3. Americans saw a considerable jump in wages – which also surprised most economists – by increasing 0.6 percent in January 2024. This now marks a 12-month average increase of 4.5 percent, well above the current inflation rate and Federal Reserve targets. Nevertheless, consumer sentiment remains high across the country.

4. The nation’s unemployment rate remained at 3.7 percent for the third consecutive month, and the 24th straight month below four percent – a stretch not seen since 1967.

5. With continued pressures on development across the country, the construction workforce grew by 11,000 in January, which represents a total gain of 216,000 since the beginning of 2023.

Report Summary

According to the latest U.S. Jobs Report, to kick off the first month of 2024, the U.S. economy defied all expectations by adding 353,000 jobs to Total Nonfarm Payroll employment.  Meanwhile, the nation’s unemployment rate remained at 3.7 percent for the third consecutive month.

During January, the key growth sectors had familiar faces, while several core industries also saw major gains. Notably, these sectors included Health Care, Government, Manufacturing, Professional and Business Services, Social Assistance, and Retail Trade. 

Adding to the gains, the change in total nonfarm payroll employment for December was adjusted upwards by 117,000 jobs, from 216,000 to 333,000. The figures for November also increased with an adjustment by 9,000 workers from 173,000 to 182,000.      

As noted, the nation’s unemployment rate remained at 3.7 percent in January for a third consecutive month. This now marks the 24th straight month being below the 4 percent threshold, a stretch not seen since 1967.

Over the course of the month, the labor force participation rate and employment-population rate had little movement from the close of 2023.

Also exceeding expectations, wages increased by 0.6 percent in January, a critical data point for the Federal Reserve. Critical to that notion is the Federal Reserve’s forecast of a four percent year-on-year rate – the economy is now at 4.5 percent wage growth over the previous 12-months.

Key Industries

• Leisure and Hospitality

  The Leisure and Hospitality sector had a slight uptick in hiring with the addition of 11,000 workers. The monthly growth pace in new jobs has slowed for the industry which is still recovering from the disastrous impact of COVID-19.

• Health Care

  Health Care once again led the economy in job growth by adding a staggering 70,000 new jobs, outpacing the monthly average hiring trends seen across the previous two years.

• Government

  The Government sectors remained hot in the nation’s job market adding 36,000 new workers in January. Local Government added 19,000 new jobs, with the Federal Government increasing payrolls by 11,000 workers.

• Social Assistance

  Employers in the Social Assistance sectors stayed right on their hiring pace by adding 23,000 jobs in January, the exact monthly trend seen in 2023.

• Transportation and Warehousing

  As an industry, Transportation and Warehousing sectors added 16,000 jobs in January. In a shift from 2023 trends, the Warehousing and Storage sector led the wider industry in job growth with the addition of nearly 6,000 new workers.

• Manufacturing

  Manufacturing employers increased payrolls in January by 23,000 jobs. After a slow hiring stretch in 2023, this growth does provide for optimism for the new year. Sector gains were led by Chemical Manufacturing and Printing activities.

For more information on the latest Jobs Report, including additional details on the data concepts and statistical methodologies utilized, visit the Bureau of Labor Statistics Employment Situation Summary website.

If you are interested in learning more about the Jobs Report, along with how we support our clients with dynamic labor analytics, we would be excited to connect you with one of our location strategy experts: