A massive beat for January jobs gains, as well as a big revision for the December tally, has Fed rate bets accelerating and stocks moving lower Friday.
The U.S. economy added far more new jobs than forecast last month, the Labor Department said Friday, with a big revision for its December reading, adding even more fuel to the Federal Reserve’s hawkish outlook on rates and inflation.
The Bureau for Labor Statistics said 467,00 new jobs were created last month, with headline unemployment rate rising from a post-pandemic low to 4%. The January tally was firmly ahead of the Street consensus forecast of 150,000.
The BLS also revised its December jobs addition estimate to a whopping 510,000 from its original estimate of 199,000.
The BLS noted that hourly wages were up 0.7% in January, and 5.7% on the year, to $31.63 per hour, with the year-on-year reading coming in well ahead of Street forecasts.
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Earlier this week, Payroll processing group ADP said in its National Employment Report, which it compiles with Moody’s Analytics, that the economy lost 301,000 private sector jobs last month, a surprising figure that shocked analysts looking for a 200,000 gain.
The Labor Department’s Job Openings and Labor Turnover Survey for the month of December, known as JOLTS, showed a modest decline in the national ‘quit rate’ but still indicated that nearly 11 million positions remained unfilled.
Contracts tied to the Dow Jones Industrial Average are indicating a 270 point opening bell gain following the BLS release, while those linked to the S&P 500 suggesting a 20 point move to the downside.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.1% higher at 95.415 while benchmark 10-year Treasury note yields jumped to 1.901%.
