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The US economy added far more jobs than expected in January, driven by a surge in employment in the leisure and hospitality sectors.
That one service sector saw an increase of 128,000 jobs in the month, led by 99,000 jobs in restaurants and bars alone, the Bureau of Labor Statistics said in a report released on Friday. Hotel employment continued to rise, rising by 15,000 for the month. Nonetheless, employment in the leisure and hospitality sectors remained well below pre-Covid levels.
The second-biggest gain was professional and business services employment, which rose by 82,000. Freelance, scientific and technical services led to the increase.
Government employment rose by 74,000 in January, led by state education jobs (35,000), reflecting the return of university workers after a strike.
The distribution of attitudes was wide. Healthcare added 58,000 jobs in January, while retail employment rose by 30,000.
Overall, nonfarm payrolls rose 517k in January, nearly triple the Dow Jones estimate of 187k. The unemployment rate fell to 3.4%, the lowest level since May 1969.
“It’s encouraging to see a strong jobs report amid recession concerns and ongoing layoffs in the tech industry,” said Steve Rick, chief economist at CUNA Mutual Group. “Nevertheless, we will continue to pay particular attention to factors that could affect the labor market, such as further rate hikes, inflation and geopolitical issues.”
The surprise surge in job creation came despite the Federal Reserve’s aggressive monetary tightening campaign, which pushed the central bank’s interest rates to their highest levels since 2007 this week.