February 4, 2023
The US economy added +517,000 jobs in January, blowing away expectations of a +187,000 increase.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/02/Screen-Shot-2023-02-03-at-9.26.15-AM.png)
In addition to the surprise outperformance in January, previous months were revised upwards by +34k in November and +37k in December, for total of +71k.
As a result, average job gains over the past three months were +356k per month
Leisure and hospitality led gains, adding +128,000 jobs in January. However, this remains -495,000 (or -2.9%) below pre-Covid levels.
Professional and business services added +82k jobs, government added +74k, health care +58k, retail +30k (its first gain in several months), construction +25k, transportation and warehousing +23k, social assistance +21k, and manufacturing +19k.
The US unemployment rate fell to 3.4%, its lowest rate since May 1969.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/02/Screen-Shot-2023-02-03-at-9.29.08-AM.png)
In fact, the unemployment rate went down despite an increase in the labor participation rate to 62.4%, matching its previous post-Covid high (labor participation remains down, following Covid).
![](https://www.patrickchovanec.com/wp-content/uploads/2023/02/Screen-Shot-2023-02-03-at-9.30.51-AM.png)
The absolute number of unemployed (actively seeking work) fell below 5.7 million, lower than before Covid, in what was considered a very robust job market.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/02/Screen-Shot-2023-02-03-at-9.34.47-AM.png)
Average hourly wages rose +0.3% m/m in January, up +4.4% from a year ago. However, this remains below the rate of consumer inflation (CPI = +6.4% y/y in December) so real wages have still declined.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/02/Screen-Shot-2023-02-03-at-9.46.16-AM.png)
In 3Q2022 (the latest available calculation), real hourly wages were down -4.0% from a year before.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/01/Screen-Shot-2023-01-13-at-12.14.16-PM.png)
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