Wednesday, May 29, 2024
29 C
Brunei Town

US saw surprisingly robust hiring in January despite Covid surge

WASHINGTON (AFP) – The United States (US) economy brushed off a spike in COVID-19 infections to add 467,000 jobs in January, far better than expected and a potential sign that the pandemic’s days of disrupting businesses are numbered.

Labor Department data released on Friday also showed major industries hiring, overall employment gains for 2021 revised higher, and more people entering the workforce, which pushed the unemployment rate up slightly to four per cent.

The report was a welcome surprise for President Joe Biden, who has struggled to defend his economic policies as his approval ratings slid amid months of hiring data in which the surge in jobs he promised when taking office a year ago proved elusive.

“America is back to work,” the president said in a speech at the White House, cheering the “extraordinary resilience and grit” of US workers.

“This has never happened here,” he said, pointing at a chart showing employment growth alongside the records of six previous presidents. “History’s been made here.”

Many economists expected the data to show either weak hiring or perhaps a contraction in employment because the US was weathering a massive increase in COVID-19 infections in January, during the time the survey was taken.

The unexpectedly positive report will likely bolster the Federal Reserve’s belief that the economy is healthy enough to raise the interest rate off zero.

Hiring sign outside a retail store in Vernon Hills, Illinois. PHOTO: AP

With inflation also high, top officials have strongly signalled that at their upcoming March meeting, they will make their first rate increase since the coronavirus caused the economy to collapse nearly two years ago.

Analysts said the figures highlighted the economy’s resilience.

“Omicron, Schmomicron,” Ian Shepherdson of Pantheon Macroeconomics said. “These data make it clear that the labour market ahead of Omicron was much stronger than previously believed.”

Overall, the economy has added 19.1 million jobs since the nadir of the COVID-19 crisis in April 2020, but it is still short 2.9 million positions, the data said.

Beyond January’s job growth, some economists say even better news was found in upward revisions the Labor Department announced to last year’s payroll data.

These showed hiring in November and December – months when the initial reports were surprisingly weak – was a massive 709,000 positions higher than first reported.

“This underscores a strong economy, ready to take the gold and move on to the next stage,” Beth Ann Bovino of S&P Global Ratings said.

However, the report said hiring was a total of only 217,000 positions higher for all of 2021, since some months’ totals were revised lower.

Major industries that took on workers in January included the bars and restaurants that comprise the leisure and hospitality sector, which gained the most of any industry with 151,000 positions.

Professional and business services added 86,000 positions and retail trade 61,000.

The labour force participation rate, indicating the share of the US population working or looking for work, ticked up slightly to 62.2 per cent, the data showed.

That metric had seen scant improvement over much of 2021, though its increase may also account for the rise in the unemployment rate from 3.9 per cent in December.

There was, however, little movement in the elevated jobless rates of minority groups.

Unemployment among Black Americans was 6.9 per cent and for Hispanics 4.9 per cent, compared to the 3.4-per-cent jobless rate for white workers.

Average hourly earnings ticked up again to USD31.63, making them 5.7 per cent higher for the past 12 months as the economy weathered a spike in consumer prices.

But there were still signs in the report of the impact from COVID-19.

The government said 3.6 million people were employed but not at work because of an illness at the time the survey was taken, an all-time high.

The number of people who said they couldn’t work because their employer’s business was closed or otherwise affected by the pandemic also jumped to six million.

In December, only 3.1 million workers were in such a position.

spot_img

Latest

spot_img