Jobs Report Shows Tight Labor Market Tightening

The U.S. economy recorded an increase of 467,000 jobs in January while unemployment increased to 4.0%, the U.S. Bureau of Labor Statistics (BLS) announced Friday.

Total non-farm payroll employment increased to 467,00 in January, according to the BLS, and the number of unemployed Americans increased to 6.5 million. Economists surveyed by The Wall Street Journal projected the economy to have added 150,000 jobs in January and unemployment to have fallen to 3.9%.

Many economists expected to see a slowing in the labor market recovery caused by the widespread Omicron coronavirus variant, which forced workers to call in sick.

“The January employment report will be a temporary setback for the labor market,” Sarah House, a senior economist at Wells Fargo, told the WSJ. “It really has been impacted by Omicron and therefore isn’t giving us the full story of where the labor market is heading over the coming months.”

Private firms’ payroll recorded a massive decrease in jobs, falling by 301,000 in January as the Omicron variant weakened the recovering labor market, according to the ADP National Employment Report released Wednesday. January’s figure marked a significant decrease from the 776,000 private jobs added in December 2021.

The Labor Department also announced Tuesday that there were 10.9 million job openings in December 2021, a slight increase from November’s 10.8 million figure. Meanwhile, the number of workers who quit their jobs fell to 4.3 million in December 2021 down from November’s record 4.5 million.