The 2024 Labor Market Starts With A Bang

The labor market kicked off 2024 with a bang as January created way more jobs than anyone was expecting, according to the latest data from the Bureau of Labor Statistics.

  • Total nonfarm payroll employment rose by 353,000 in January, up from the revised 333k in December and the best month since last January.
  • The unemployment rate held at 3.7% for the third straight month.

Beat The Street. Talk about a swing-and-miss. Economists had projected 170k which is less than half of what the actual number was.

White Collar Workers. Professional and business services took the top spot with 74,000 new jobs in January. Healthcare was a close second with 70,000 new jobs followed by retail trade (+45k), government (+36k), and social assistance (+30k).

  • No Change. Employment showed little change over in construction, wholesale trade, transportation and warehousing, financial activities, leisure and hospitality, and other services.

Wages. Average hourly earnings for all employees on private nonfarm payrolls rose by 0.6 percent, to $34.55 in January, up from the 0.4% rise in December and the biggest monthly increase since March 2022.

  • Outpacing Inflation. Wages are outpacing inflation with wage growth up 4.5% year-over-year which beats CPI’s 3.4% and PCE’s 2.6%.

Upward Revision. A huge revision for December with job growth jumping 117,000 to 333,000. November saw a much smaller upward revision with a 9,000 correction to 182,000.


  • Ben Casselman: “Job growth “slowed” last year, but some perspective: After today’s revisions, 2023 now stands as the best year for job growth since 1999, not counting the two years immediately before, as the economy emerged from the pandemic.”
  • Jennifer Lee: “I’m sure [Fed Chair Powell’s] very glad that he dismissed that possibility of a March rate cut because that’s definitely not happening,”
  • Daniel Zhao: “This just reaffirms that the jobs market is entering 2024 on solid ground. The fact that job growth was so widespread across industries is a healthy sign.”

BOTTOM LINE: The only way we are getting a rate cut in March is if we see a huge negative jobs report to start March and inflation collapsing to under 2.0%. Neither of which is likely to happen…