U.S. job creation in January was far stronger than nearly all analysts forecast, even with the omicron variant keeping a record number of Americans home sick.
"The labor market is so tight that even a massive COVID surge can't disrupt hiring," said Edward Moya, a senior market analyst with OANDA.
About 467,000 jobs were added in January, according to the U.S. Bureau of Labor Statistics monthly jobs report, released Feb. 4. This was well above expectations, many of which were predicting job losses for the month. The bureau also revised upward two previous monthly reports, increasing November and December's job gains by a combined 709,000.
"The employment recovery overall has been remarkable," said Oren Klachkin, lead U.S. economist with Oxford Economics. "It's a lesson that we shouldn't underestimate the economy's dynamism."
While the unemployment rate was relatively unchanged at 4%, the number of employed Americans who were unable to work due to illness reached a record 3.6 million in January, as omicron cases spiked throughout the U.S. This was roughly 80% higher than the previous record, set in April 2020.
The bureau reported that more than 6 million Americans were unable to work in January because an employer closed or lost business due to the coronavirus pandemic, roughly double from the previous month.
In addition, 1.8 million unemployed Americans could not look for work due to the pandemic, up from 1.1 million in December, the bureau reported.
With so many potential workers staying home due to COVID-19, job openings have surged, climbing to over 10.9 million at the end of December, up about 62% from a year earlier, the bureau reported Feb. 1.
There were 1.7 job vacancies for every unemployed American, James Knightley, chief international economist with ING, wrote in a Feb. 4 note.
"This suggests the demand for workers is strong and as COVID cases and COVID caution subsides we expect employment growth to be even stronger than what we saw today," Knightley wrote.
Job growth was particularly strong in the leisure and hospitality sector where 151,000 jobs were added in January, including nearly 131,000 in accommodation and food service. An additional 61,400 jobs were added in retail and more than 54,000 in transportation and warehousing.
The labor force participation rate, or the number of workers in the population in the job market, reached 62.2%, its highest level since March 2020. This increase was largely due to the upward revision in job growth in November and December, Moya said.