US economy adds 353,000 jobs in January - trouncing expectations in surprise boom to kick off 2024
- The report blew economists' expectations for job gains out of the water
- Unemployment rate remained at 3.7%, the 24th straight month below 4%
- America's job market remains shockingly strong amid soaring interest rates
The US economy added 353,000 jobs in January - a blowout gain to start off 2024.
January's surprise job gains trounced economists' expectations. Forecasts had estimated growth of 176,500 last month, according to FactSet.
It is the latest sign of the economy's continuing ability to shrug off the highest interest rates in two decades.
The unemployment rate also remained at 3.7 percent, according to Bureau of Labor Statistics data released Friday, defying expectations of a rise to 3.8 percent. This marks the 24th straight month that the unemployment rate has remained below 4 percent - the country's longest run since the 1960s.
This is despite headlines in recent weeks being dominated by high profile lay-offs -including at tech firms Microsoft and PayPal and delivery company UPS.
![The US economy added 353,000 jobs in January - blowing economists' expectations out of the water](https://i.dailymail.co.uk/1s/2024/02/02/14/80778649-13038041-image-a-20_1706885351732.jpg)
The US economy added 353,000 jobs in January - blowing economists' expectations out of the water
The benchmark S&P 500 and the tech-heavy Nasdaq opened higher on Friday as investors cheered the positive jobs report - and robust quarterly reports from Meta and Amazon the day prior.
While the report demonstrates the strength and solidity of the US economy, it also raises questions about how soon the Federal Reserve may begin to lower interest rates.
Over the past year, a solid jobs market has helped to support consumer spending and in turn economic growth even as borrowing costs rose. The strong start this year signals that the labor market is set to continue bolstering the economy.
The January hiring figures come as economists and policymakers are closely monitoring the direction of the economy in the face off potential rate cuts this year.
![The unemployment rate also remained at 3.7 percent, according to Bureau of Labor Statistics data released Friday](https://i.dailymail.co.uk/1s/2024/02/02/14/80778645-13038041-image-a-27_1706885482536.jpg)
The unemployment rate also remained at 3.7 percent, according to Bureau of Labor Statistics data released Friday
At its latest meeting on Wednesday, Federal Reserve Chair Jerome Powell said he is encouraged about the economy and the downward movement of inflation, but cautioned that there is still 'ways to go.'
The Fed voted to keep interest rates steady for the fourth consecutive meeting - keeping the benchmark borrowing rate between 5.25 and 5.5 percent.
Powell also ruled out the chance of an anticipated rate cut in March.
Following the latest jobs report, Wall Street also appears to have given up on the possibility of a cut next month.
Around a month ago, interest rate traders were expecting a 75 percent chance of a cut at the Fed's March meeting, but as of Friday morning, this had dropped below 20 percent, according to the CME FedWatch tool.
![Officials confirmed interest rates will remain at their current level of between 5.25 and 5.5 percent at Wednesday's meeting](https://i.dailymail.co.uk/1s/2024/02/02/14/80696705-13038041-Officials_confirmed_interest_rates_will_remain_at_their_current_-a-18_1706883866704.jpg)
Officials confirmed interest rates will remain at their current level of between 5.25 and 5.5 percent at Wednesday's meeting
![At its latest meeting on Wednesday, Federal Reserve Chair Jerome Powell said he is encouraged about the economy, but cautioned that there is still 'ways to go.](https://i.dailymail.co.uk/1s/2024/02/02/14/80778709-13038041-image-a-19_1706885305398.jpg)
At its latest meeting on Wednesday, Federal Reserve Chair Jerome Powell said he is encouraged about the economy, but cautioned that there is still 'ways to go.
Wages also rose unexpectedly fast in January.
Average hourly pay climbed a sharp 0.6 percent from December and 4.5 percent from January 2023.
Professional and business services were among sectors seeing job gains, alongside health care and retail trade, said the Labor Department.
But it added that employment fell in areas like mining, as well as the oil and gas extraction industry.
'Make no mistake, this was a blowout jobs report and will vindicate the recent posturing by the Fed which effectively ruled out an interest rate cut in March,' George Mateyo, chief investment officer at Key Private Bank, told CNBC.
'Moreover, strong job gains combined with faster than expected wage gains may suggest an additional delay in rate cuts for 2024 and should cause some market participants to recalibrate their thinking.'
Nick Bunker, Economic Research Director at Indeed, said: 'If the dominant labor market narrative in 2023 was slow and steady moderation, then 2024 began fast and furious.
'The gains in January were also broad-based – almost two-thirds (65.6 percent) of industries adding jobs or holding steady in January, the highest level since January 2023.
'But while the headline data contains many great signs for job seekers and workers, some indicators are at least flashing yellow. Still, this is an undeniably great start to 2024 and hopefully represents a strong foundation to build on over the year.'