More than half a million new jobs were created last month, the Labor Department said, nearly triple Wall Street forecasts.
Updated at 8:44 am EST
The U.S. economy added far more new jobs than forecast last month, the Labor Department said Friday, ripping past Street forecasts and testing the market’s assumption that inflation will slow sharply into the first few months of the year.
The Bureau for Labor Statistics said 517,000 new jobs were created last month, blasting the Street consensus forecast of a 185,000 gain. Private payrolls were up 443,000, the BLS said, as the unemployment rate slipped to 3.4%, back to the lowest levels since 1969.
The BLS also revised its December jobs addition estimate to 260,000 from its original estimate of a 223,000 net gain.
The BLS noted that hourly wages were up 0.3% on the month, a similar level to December and around half of the November pace, a tally that matched Street forecasts. On a year-on-year basis, wages were up 4.4%, compared to the 4.6% pace recorded in December, the BLS said, and the Street forecast of 4.3%.
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U.S. stocks extended earlier declines following the data release, with the Dow Jones Industrial Average indicating an opening bell slide of around 140 points and those linked to the S&P 500 priced for a 43 point slump. The Nasdaq was called 208 points lower.
Benchmark 10-year Treasury note yields jumped 9 basis points to 3.488% while 2-year notes surged 9 basis points to 4.214%.
The CME Group’s FedWatch suggests an 94.5% chance of a 25 basis point rate hike in March, up from around 82% prior to the data release and just 59.2% a month ago.
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Earlier this week, payroll processing group ADP said private hiring slowed sharply, to just 106,000 new positions last month, while BLS data showed new applications for unemployment benefits fell by 3,000 to 185,000 over the period ending on January 28.
The Challenger job cuts report for December, however, said layoffs rose 136% from last year to just under 103,000. JOLTs data for the month of December, however, indicated around 11 million open positions, a level that could feed in to pay gains over the coming months.
