A January jobs report released Friday by the U.S. Bureau of Labor Statistics showed that total nonfarm payroll employment rose by 467,000, a surprisingly positive development after a pandemic-related slump.
“Employment growth continued in leisure and hospitality, in professional and business services, in retail trade, and in transportation and warehousing,” said the bureau.
According to the White House, this marks 6.6 million jobs created since President Joe Biden took office, as well as the largest drop in the unemployment rate on record.
During a speech Friday, Biden said the country has recently seen the strongest economic growth in 40 years and the largest reduction in childhood poverty ever seen in a single year.
“I’m proud of the role the administration and the economic plan has played in this recovery,” he said, adding that the American Rescue Plan and bipartisan infrastructure plan helped bolster the economy as we continue to deal with the COVID-19 pandemic.
In February 2020, the month before the World Health Organization declared COVID-19 a global pandemic, U.S. unemployment was at 3.5 percent and there were an estimated 5.7 million unemployed persons. As of last month, unemployment was at 4 percent (6.5 million people), down 2.4 percent (3.7 million people) over the year.
“The jobs numbers that we got in the revisions blew away even the highest of expectations,” said Cliff Hodge, chief investment officer for Cornerstone Wealth, according to NBC News.
With the announcement of positive jobs numbers, the market slumped, said the outlet. Since inflation is at a 40-year high, the market expects The Federal Reserve – the central bank for the nation and conductor of U.S.
monetary policy – to hike interest rates. This leads to market volatility.
“If you take the headline numbers and also the increase in the labor force participation rate, these are certainly all very positive factors for the economy, but for the market, the reaction makes sense if you look at it through the lens of how the Fed may react,” Hodge explained.
According to NBC, there is growing evidence that more people are being drawn back into the workforce due to the strength of a reopening economy and higher pay.
“Even with the extraordinary news, even with the historic economic progress we’ve made across the last year, we’ve still got a lot of work to do,” said Biden. He said that wages should continue growing.
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