The job gains were broad-based, led by a 151,000 advance in leisure and hospitality. Transportation and warehousing, retail trade and professional and business services also posted solid increases.
Economists also famously got it wrong in April 2021 when they thought rising vaccinations would lead to more people returning to the workforce, and helping explain a forecast for a 1 million jump in payrolls. But the U.S. only added 266,000 jobs that month. Projections were overly optimistic about November too, overshooting payrolls by more than twofold.
Omicron Impact
Another quirk in January’s report was revisions to reflect updated population estimates used in the household survey. Had it not been for those controls, the number of employed Americans would have dropped by 272,000, according to the Labor Department.
By the same token, the participation rate -- the share of the population that is working or looking for work -- would have been unchanged from December, rather than the registered 0.3 percentage point increase.
Despite the better-than-expected headline payrolls figure, the impact of omicron on the labor market in January was significant. There were 3.6 million employed Americans not at work due to illness, more than double that in December. At the same time, 6 million people were unable to work in the month because their employer closed or lost business due to the pandemic, roughly twice that in December.
“These absences do have a really big economic impact,” said Daniel Zhao, senior economist at Glassdoor. “It’s unclear how that will show up in the aggregate data, but is a trend to definitely keep an eye on.”
--With assistance from Raeedah Wahid and Emma Kinery.
This article was provided by Bloomberg News.