The US added 467,000 new jobs to the payroll in January beating estimates despite business closures caused by Omicron.
The surprise boost to the payroll was far ahead of estimates given to Bloomberg by economic analysts who predicted new jobs would stand at 125,000. While the unemployment rate ticked upwards from 3.9 per cent to four per cent the number of long-term unemployed fell to 1.7m in January, down from 2m in December.
Commenting on the data, Dan Boardman-Weston the chief investment officer at BRI Wealth Management, commented that the new data provides “an impressive set of figures given that the US has been battling a huge rise in Omicron infections and it shows that employers are still confident enough to continue hiring.
“The data is likely to add further pressure on the Fed to start raising interest rates and unwinding their trillion dollar balance sheet. Markets are likely to be spooked by the numbers and we’d expect that stocks that are more sensitive to higher interest rates will continue to be volatile over the coming months if economic data remains robust,” he continued.
The prime-age participation rate, which measures employment levels among 25 to 54 year olds, reached a pandemic high at 82 per cent. The strong jobs data underscores the case for an interest rate rise which is currently being mulled by the US Federal Reserve.
Yesterday, Richmond Federal Reserve president Thomas Barkin said the US will need to begin raising interest rates soon, adding that it is too early to say how far or fast that process will need to go in order to bring inflation under control.