The US not only avoids a recession, but creates hundreds of thousands of new jobs

U.S. businesses pulled off a surprising burst of hiring at the start of 2024, adding 353,000 jobs in January, in the latest sign of the economy’s ability to absorb the highest interest rates in two decades.

The government report released Friday found that jobs created in January — far more than economists had predicted — surpassed the already high figure of 333,000 in December. The unemployment rate remained at 3.7%, almost the lowest in half a century.

Salaries also saw a staggering increase in January. Average hourly compensation rose 0.6% compared to December, the highest monthly increase in almost two years, and 4.5% compared to January 2023. The marked increase in hiring and salaries could complicate or delay the intention of the Reserve Federal to begin reducing interest rates in the coming months.

The most recent increases indicate that employers are willing to continue hiring to respond to sustained consumer spending. The electoral campaign, which is gaining strength, depends in no small measure on how President Joe Biden’s economic management is perceived.

Surveys reveal widespread dissatisfaction because even though inflation has slowed, most prices remain above pre-pandemic levels. Still, some recent polls show a gradual rise in public approval.

This week, Fed Chair Jerome Powell said that “the economy is performing well, the labor market remains strong. The central bank made clear that while the long-awaited time to cut interest rates is approaching, it is in no rush to do so.

Friday’s jobs report indicated broad-based hiring gains across all sectors. Professional and business services, a category that includes managers and technicians, added 74,000 positions. Healthcare companies created 70,000, retail 45,000, governments at all levels 36,000 and manufacturers 23,000.

The unemployment rate has been below 4% for two consecutive years, the longest streak since the 1960s.