U.S. Job Growth Nearly Doubled Expectations in January

The U.S. labor market has remained surprisingly strong despite interest rates that are now at a two-decade high. In January, job growth surged, and unemployment remained low – both exceeding economists’ expectations.

Employers added roughly 353,000 workers to payrolls in January 2024, according to the Bureau of Labor Statistics (BLS). That was an improvement over the 333,000 jobs gained in December (which was revised up), and the biggest one-month gain in a year. In addition, that recent job gain came in at nearly twice the rate (+185,000 jobs) that economists were forecasting.

Of note: The job counts for November to December were revised considerably higher. Upward revisions to November 2023 data showed 9,000 more jobs were added than previously reported, up to 182,000 positions. The December 2023 growth number was also revised up, increasing by 117,000 jobs to a total of 333,000 positions. With these revisions, employment gains in November and December combined were 126,000 jobs higher than previously reported.

Recent job gains were above the monthly average of around 255,000 jobs added throughout calendar 2023 and were ahead of pre-pandemic norms. From 2015 to 2019, the U.S. economy added an average of roughly 190,000 jobs each month.

On an annual basis, the nation gained more than 2.9 million jobs in January 2023. Although that was the weakest annual gain since March 2021, it was above the average of around 2.4 million jobs added annually from 2015 to 2019.

The U.S. economy has recovered all the net jobs lost during the COVID-19 pandemic. As of January, the nation had nearly 5.4 million more jobs (+3.5%) compared to the pre-pandemic employment level from February 2020.

Jobs by Industry

Job growth in January was seen in 10 of 11 major industry sectors. The most notable job base expansion was in Education and Health Services (+112,000 jobs). Solid gains were also recorded in Professional and Business Services (+74,000 jobs) and Trade, Transportation and Utilities (+64,000 jobs). Smaller job gains were seen in Government (+36,000 jobs), Manufacturing (+23,000 jobs), Information (+14,000 jobs), Leisure and Hospitality Services (+11,000 jobs), Construction (+11,000 jobs), Financial Activities (+8,000 jobs) and Other Services (+5,000 jobs).

The Mining and Logging sector was the one major industry to lose jobs from December to January. That industry lost 6,000 jobs during the month.

Most major industries have recovered all the jobs lost during the COVID-19 pandemic downturn. Professional and Business Services has seen the best recovery, with the recent job count coming in roughly 1.54 million positions ahead of February 2020 numbers. Also well ahead of pre-pandemic norms were Education and Health Services (+1.37 million jobs) and Trade, Transportation and Utilities (+1.24 million jobs).

Alternatively, some of the harder-hit sectors remain below pre-pandemic job counts. Despite recent gains, employment in the Leisure and Hospitality Services sector is still well below pre-pandemic employment counts (-75,000 jobs). Other industry sectors yet to recover all the jobs lost during the COVID-19 downturn include Other Services (-73,000 jobs) and Mining and Logging (-49,000 jobs).


The unemployment rate (U3 or headline unemployment rate, which is seasonally adjusted) remained unchanged the third consecutive month in January, with the rate remaining at 3.7%. The nation’s unemployment rate has now remained below 4% for two years, the first such occurrence since the late 1960s.

Since February 2022, the unemployment rate has been in a narrow range of 3.4% to 3.8%. At the onset of the pandemic, the unemployment rate climbed to 14.8% in April 2020. Prior to the pandemic, the unemployment rate clocked in at 3.5% to 5.7% from 2015 to 2019, averaging 4.4% during that period. Prior to 2023, the unemployment rate hadn’t registered below 3.5% since 1969.

The total number of unemployed persons in the U.S. registered at roughly 6.12 million in January, down from about 6.27 million in December.

The unemployment rate for adult men (20 years and over) increased 10 bps from December to January, to 3.6%. The unemployment rate for adult women (20 years and older) decreased 10 bps to 3.2%. Meanwhile, the unemployment rate for teenagers (16 to 19-year-olds) dropped 130 bps from 11.9% in December to 10.6% in January.

Average Hourly Earnings

Average hourly earnings among employees on private nonfarm payrolls rose $0.19 (+0.6%) from December to January. That monthly increase took average hourly earnings to $34.55 in January. On an annual basis, average hourly earnings were up $1.48, a 4.5% increase year-over-year. Overall wage growth continues to surpass rising prices, as the Consumer Price Index (CPI) rose 3.4% annually in December. The Fed’s target for inflation is currently at 2%.

Wage growth over the past year was strong across most major industries. The largest increases in earnings from January 2023 to January 2024 were recorded among workers in Mining and Logging (5.8%), Other Services (5.6%), Financial Activities (5.3%), Construction (5.2%), Manufacturing (5%) and Professional and Business Services (4.6%). The smallest increases were among employees in Information (3.1%), Education and Health Services (3.7%), Trade, Transportation and Utilities (4.3%) and Leisure and Hospitality Services (4.4%).