Investors, economists, and finance executives all braced for a subdued jobs report on Friday. Days before, the White House sought to lower expectations, disclosing that the omicron variant had caused nearly 9 million workers to call out sick just when the government collected jobs data. Then on Thursday, the ADP employment report for January revealed private payrolls shrinking by 301,000.
Come Friday morning, though, the Bureau of Labor Statistics (BLS) data showed the economy still on the growth track: nonfarm payrolls, by the BLS’s count, rose by 467,000 in January. In addition, the revised BLS totals for November and December increased those months’ gains by 709,000.
While the difference between the January ADP and BLS numbers is a head-scratcher, It’s happened before. And in the short term, job numbers have always been volatile. The trend over several months is more critical: despite a December 2020 dip below zero, both data sets show significant ongoing increases in employment since last fall. The U.S. added between 7 million and 9 million jobs (net) since September 2020.
Last month’s U.S. employment situation was not pandemic-free: during January, about 3.6 million employed Americans were not at work due to illness, and 6 million were unable to work because their employer closed or lost business due to the pandemic, according to the BLS.
Still, among economists, the BLS release seemed to ease doubts raised earlier in the week about the wisdom of the Federal Reserve’s commitment to tightening monetary policy.
Beth Ann Bovino, U.S. Chief Economist, S&P Global Ratings, said the January gains and the upward revisions of the prior two months “put the Fed on solid ground to act.”
Said Stifel Chief Economist Lindsey Piegza: “This morning’s report certainly offers additional justification for the Fed’s new more hawkish stance as well as a welcomed data point ahead of the [Federal Open Market Committee] pulling the trigger on a removal of pandemic-level accommodation potentially just 40 days from now.”