US employers delivered an unexpected surge of hirings to begin 2024, with the US Labor Department recording around 353,000 additional jobs in January in the latest sign of the economy's continuing ability to negate the highest interest rates in two decades.
The department's report on Friday (Feb. 2) showed that the job gain surpassed December 2023's figures of 333,000 new jobs. However, the unemployment rate remained at 3.7%.
The Associated Press reported that the latest gains far exceeded expectations and showcased employers' enthusiasm to keep hiring to meet steady consumer spending.
The figures were released as the US election campaign season was in full swing. Public polls showed widespread dissatisfaction with US President Joe Biden, largely because even though inflation has sharply slowed, most prices remain well above pre-pandemic levels. Some recent surveys, though, showed public approval gradually improving.
According to Bloomberg, the job gains were broad-based across the sectors, led by professional and business services, health care, retail trade, and social assistance. Nearly all sectors, except mining and gas extraction, saw additional jobs in January.
Fed Fights Inflation
The Federal Reserve took note of the economy's durability, with Fed Chair Jerome Powell saying that the economy was "performing well" and the labor market remained "strong." Despite nearing the long-awaited shift toward cutting interests, they were not in a hurry to do so.
Since March 2022, the Fed has been combating inflation by raising its benchmark rate by 11 times.
Consumers have proved more resilient than expected in the face of the Fed's rate hikes. Having socked away savings during the pandemic, most were willing to spend it as the economy reopened. A wave of early retirements, some of them related to COVID-19, limited the number of people available for work and contributed to a tight labor market.
