FX.co ★ U.S. Job Growth Far Exceeds Economist Estimates In January

The U.S. labor market exhibited notable vigor as January's employment data soared above anticipations, according to the latest Labor Department report. Non-farm payroll employment witnessed a leap of 353,000 jobs in the initial month of the year, far exceeding economists' predictions of a rise of approximately 180,000 jobs.

The December surge, previously under-reported, also demonstrated exceptionally robust performance; with a sharp escalation to 333,000 jobs from the initial estimate of 216,000 jobs. Chris Low, Chief Economist at FHN Financial, interprets these numbers favourably for the Federal Open Market Committee's (FOMC) policy direction. These figures should not deter the FOMC from lowering rates, he said. Although, he doesn't believe it will urge them to hasten the rate-cutting process.

The robust rise in job growth in January was partially buoyed by a substantial increase in healthcare and social assistance sector employment, which added 100,400 jobs to the payroll. Additionally, significant growth was seen in professional and business services and the retail sectors. Conversely, employment numbers fell in industries related to mining, quarrying, and oil and gas extraction.

The Labour Department report also disclosed that January's unemployment rate held steady at 3.7%, not budging from December's figure. Economists had projected a slight rise to 3.8%. The status quo was maintained due to a contraction in the labor force by 175,000 persons, coupled with a decline in household survey measure of employment by 31,000.

Average hourly earnings in January also climbed, rising by 0.6% or $0.19 to reach $34.55. On an annual comparison, wage growth nudged upwards from a revised 4.4% in December to 4.5% in January, exceeding analysts' expectations of a static figure in relation to the previously reported 4.1% for December.