WASHINGTON, United States—The 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 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 percent.
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 United States 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.
With inflation also high, top officials have strongly signaled 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 labor 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.