U.S. Job Market in January Delivered Much Stronger Key Metrics with Huge NFP Upside Revisions

The January employment reports delivered much stronger key metrics than expected, nonfarm payrolls, private sector payrolls, the unemployment rate, and average hourly earnings were all stronger than expected. In particular payroll data where January non-farm payrolls came in 353K vs +180K expected and December was revised to +333K from+216K, November was revised to +173K from +164K, a combined 126,000 higher than previously reported. Updated population estimates decreased the estimated size of the civilian non-institutional population by 625,000 and the civilian labor force by 299,000 in December.

U.S. Treasuries slid after the jobs report with expectations higher by a wide margin with payroll growth coming in twice as high as expected. There was a notable drop in the average workweek however to 34.1 hours from 34.3 hours. The key takeaway is that the Fed on balance will likely find as Chair Powell alluded to at this week’s FOMC that a March rate cut is unlikely.


What is starting prior to these revisions December was the largest drop in household employment since April 2020, a spike in the duration of unemployment spells. This meant it’s taking longer for unemployed Americans to find work. Of concern was a drop in labor participation, greater number of temp workers unable to find jobs and more people taking part-time work for economic reasons amid a decline in working hours. Now we have these huge revisions to confuse and put more doubt on government reports.

The participation rate, the share of the population that is working or looking for work does remain at 62.5%, after it fell by 0.3 percentage point to 62.5% in December, the largest monthly drop in nearly three years. The decrease was concentrated among younger and older workers. For those ages 25-54, participation eased 0.1 point.

We have the unaffordability of higher borrowing costs following the Federal Reserve’s rate hiking spree, persistent inflation and war theatres in the Middle East and Ukraine. The report could lead Fed officials to quicken their lowering pause. Next week’s inflation will hint further there.

The rule by former Federal Reserve economist Claudia Sahm posits the start of a recession when the three-month moving average of the unemployment rate rises by a half-percentage point or more relative to its low during the previous 12 months. The low was 3.4% and October was the highest in 2023 so far, following two readings at 3.8% in August and September. A rate above the 3.9% level that would trigger the Sahm Rule.

The report was stronger than the ADP Employment Report for January which showed private payrolls increased by just 107k. Lots of head fakes in terms of the relationship to nonfarm private payrolls. The report is released two days ahead of the BLS employment report.

January 2024 US Employment Report

US Jobs Report

January 2024 US Employment Report and Expectations



  • Change In Nonfarm Payrolls Jan: 353K (est 185K; prevR 333K)
  • Unemployment Rate Jan: 3.7% (est 3.8%; prev 3.7%)
  • US Labour Force Participation Rate Jan: 62.5% (est 62.6%; prev 62.5%)
  • Prior two-month net revision Jan: +126K vs -71K prior
  • December revised to +333K from+216K
  • November revised to +173K from +164K
United States Non-Farm Payrolls
What The Top Economists Were Forecasting in Today’s US Jobs Report @LiveSquawk


The jobless rate was unchanged at 3.7% in Januaryr the Labor Department reported Friday. The unemployment rate is higher than the pre-pandemic rate of 3.5%, which was a 50-year low. (This was bettered in Jan at 3.4%) The job market is still tight, with the national unemployment rate hovering near half-century lows but this is an 18-month high. The unemployment rate and number of unemployed persons prior to the coronavirus (COVID-19) pandemic was 3.5 percent and 5.7 million, respectively, in February 2020).

The number of employed persons in The United States decreased to 161,152,000 in January of 2024 from 161,183,000 in December of 2023. Employed Persons in the United States averaged 107,022,210 from 1948 until 2024, reaching an all-time high of 161,866,000 in November of 2023 and a record low of 571,720,000 in June of 1949.

  • Change In Private Payrolls Jan: 317K (est 168K; prevR 278K)
  • Change In Manufacturing Payrolls Jan: 23K (est 3K; prevR 8K)
  • Household survey Jan: -31K vs -683K
  • Underemployment Rate U6 Jan: 7.2% (prev 7.1%)
  • Birth-death adjustment Jan -121K vs -52K prior
  • In November, the number of long-term unemployed (those jobless for 27 weeks or more) edged down to 1.2 million. These individuals accounted for 18.3 percent of all unemployed persons.


  • Average Hourly Earnings (M/M) Jan: 0.6% (est 0.3%; prev 0.4%)
  • Average Hourly Earnings (Y/Y) Jan: 4.5% (est 4.1%; prev 4.1%)
  • Average weekly hours (M/M) Jan: 34.1 vs 34.3 expected

Other Employment Reports for December (Via ScotiaBank)

  • Consumers said jobs were materially more plentiful in January as the jobs plentiful reading within the Conf Board’s consumer confidence gauge jumped by 5.1 points to its highest reading since last June.
  • JOLTS job vacancies increased in December. They are well off the peak, but still well above pre-pandemic levels.
  • The NFIB small business measure of jobs hard to fill fell a point to its lowest since January 2021. The NFIB’s hiring plans index fell two points to its weakest since May 2020.
  • ADP private payrolls were up by just 107k. Lots of head fakes in terms of the relationship to nonfarm private payrolls.
  • Challenger layoffs increased to 82k in January from 35k but they are not seasonally adjusted. The same thing happened at the start of last year. Likely this was from companies hired so many workers out of the pandemic and then as they reported full year earnings and conducted performance reviews, they’ve been engaged in greater than normal culling of the workforce at the start of each year. Scotiabank cautioned against declaring a trend.
  • Initial jobless claims were little changed between the December and January nonfarm reference periods (the pay period including the 12th).
  • Challenger job cuts softened to 34.8k in December from 45.5k the prior month and were the lowest number since July although it is seasonally unadjusted data.
  • ISM measures are of little use. That’s because while we know that ISM-manufacturing’s employment subindex improved, it’s a small share of hiring and we don’t get the ISM-services employment figure until after payrolls this morning.
  • Categories like retail as well as leisure and hospitality will be particularly worth monitoring to see how hiring stacked up to seasonal norms.


The Labor Force Participation Rate in the United States was unchanged in January after it decreased by 0.3 percentage points to 62.50 percent in December, marking the biggest drop since January 2021. It is the lowest rate in 10 months as 845,000 people left the labor force.

Market Reaction (Updated at Stock market open)

  • U.S. Treasuries slid after the jobs report for January beat expectations by a wide margin with payroll growth coming in twice as high as expected. The post-data retreat has sent yields on longer tenors toward their opening levels from Wednesday while the 2-yr yield is back near its January closing highs.
  • In addition to pressuring Treasuries, the report has sent equity futures from their overnight highs since it gives the Federal Reserve an argument to maintain its hawkish rhetoric.
  • USD/JPY was trading at 146.67 ahead of the data and the market was pricing in 142 bps in cuts by year end and a 34% chance in March of a cut.
  • This is undoubtedly hawkish, USD/JPY is up to 147.54 immediately with March down to 21% and 127 bps on the year.

Treasury yields surged higher in response.

  • The 10-yr note yield, at 3.88% before the report, briefly moved above 4.00% before pulling back to 3.99%.
  • The 2-yr note yield, at 4.23% before 8:30 ET, jumped to 4.40% immediately after before pulling back to 4.36%.
  • 2-yr: +19 bps to 4.38%
  • 3-yr: +18 bps to 4.15%
  • 5-yr: +18 bps to 3.98%
  • 10-yr: +14 bps to 4.00%
  • 30-yr: +10 bps to 4.21%

WSJ Fed Watcher Nick Timiraos on the jobs report:

Where the Jobs Were:

Largest gains (prior month) occurring in:

  • Professional and business services (74K)
  • Health care (70K), namely ambulatory health care services (33K) and hospitals (20K)
  • Retail trade (45K); and social assistance (30K)
  • Manufacturing (23K) and government (36K).

Largest losses (prior month) occurring in:

  • Employment in mining, quarrying, and oil and gas extraction industry lost 5K jobs. 

Household Survey Data  

In January, the unemployment rate was 3.7 percent for the third month in a row, and the number of
unemployed people was little changed at 6.1 million.

Among the major worker groups, the unemployment rates for adult men (3.6 percent), adult women
(3.2 percent), teenagers (10.6 percent), Whites (3.4 percent), Blacks (5.3 percent), Asians (2.9 percent),
and Hispanics (5.0 percent) showed little or no change in January.

The number of long-term unemployed (those jobless for 27 weeks or more), at 1.3 million, was little changed in January. The long-term unemployed accounted for 20.8 percent of all unemployed people.
The labor force participation rate, at 62.5 percent, was unchanged in January, and the employment population ratio, at 60.2 percent, was little changed. These measures showed little or no change over the year.

In January, the number of people employed part time for economic reasons, at 4.4 million, changed little. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

The number of people not in the labor force who currently want a job, at 5.8 million, was little changed in January. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.

Among those not in the labor force who wanted a job, the number of people marginally attached to the
labor force changed little at 1.7 million in January. These individuals wanted and were available for
work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, increased to 452,000 in January.

Establishment Survey Data

Total nonfarm payroll employment rose by 353,000 in January, similar to the gain of 333,000 in
December. Payroll employment increased by an average of 255,000 per month in 2023. In January, job gains occurred in professional and business services, health care, retail trade, and social assistance.
Employment declined in the mining, quarrying, and oil and gas extraction industry.

Private Jobs

  • Professional and business services added 74,000 jobs in January, considerably higher than the average monthly increase of 14,000 jobs in 2023. Over the month, professional, scientific, and technical services added 42,000 jobs. Employment in temporary help services changed little over the month (+4,000) but is down by 408,000 since reaching a peak in March 2022.
  • In January, employment in health care rose by 70,000, with gains in ambulatory health care services (+33,000), hospitals (+20,000), and nursing and residential care facilities (+17,000). Job growth in health care averaged 58,000 per month in 2023.
  • Retail trade employment increased by 45,000 in January but has shown little net growth since early Over the month, general merchandise retailers added 24,000 jobs, while electronics and appliance retailers lost 3,000 jobs.
  • Employment in social assistance rose by 30,000 in January, reflecting continued growth in individual and family services (+22,000). Employment in social assistance grew by an average of 23,000 per month in 2023.
  • In January, employment in information continued its upward trend (+15,000). Employment in motion picture and sound recording industries increased by 12,000, while employment in telecommunications decreased by 3,000. Overall, employment in the information industry is down by 76,000 since a recent peak in November 2022.
  • Employment in the mining, quarrying, and oil and gas extraction industry declined by 5,000 in January, following little net change in 2023. Over the month, a job loss in support activities for mining (-7,000) was partially offset by a job gain in oil and gas extraction (+2,000).
  • Employment showed little change over the month in other major industries, including construction, wholesale trade, transportation and warehousing, financial activities, leisure and hospitality, and other services.

Government Jobs 

Government employment continued to trend up in January (+36,000), below the average monthly gain
of 57,000 in 2023. A job gain occurred in federal government (+11,000), and employment continued to
trend up in local government, excluding education (+19,000). Government Payrolls in the United States averaged 18.68k from 1939 until 2024, reaching an all-time high of 502k in August of 2020 and a record low of -914k in April of 2020

United States Government Payrolls

Manufacturing Jobs

Employment in manufacturing edged up in January (+23,000), with job gains in chemical manufacturing (+7,000) and printing and related support activities (+5,000). Manufacturing experienced little net job growth in 2023. Manufacturing Payrolls in the United States averaged 384,000 from 1939 until 2024, reaching an all-time high of 655,000 in April of 1946 and a record low of -171,500 in September of 1945


In January, average hourly earnings for all employees on private nonfarm payrolls rose by 19 cents, or
0.6 percent, to $34.55. Over the past 12 months, average hourly earnings have increased by 4.5 percent.
In January, average hourly earnings of private-sector production and nonsupervisory employees rose by 13 cents, or 0.4 percent, to $29.66.

 Wages Monthly

Wages Yearly


The average workweek for all employees on private nonfarm payrolls decreased by 0.2 hour to 34.1 hours in January and is down by 0.5 hour over the year. In manufacturing, the average workweek was unchanged at 39.8 hours, and overtime edged down by 0.1 hour to 2.7 hours. The average workweek for
production and nonsupervisory employees on private nonfarm payrolls decreased by 0.2 hour to 33.5 hours.

The change in total nonfarm payroll employment for November was revised up by 9,000, from +173,000
to +182,000, and the change for December was revised up by 117,000, from +216,000 to +333,000.
With these revisions, employment in November and December combined is 126,000 higher than
previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) The annual benchmark process also contributed to the November and December revisions.

The Employment Situation for February is scheduled to be released on Friday, March 8, 2024, at
8:30 a.m. (ET)

Total Job Gains for 2023

Non-Farm Payrolls were revised lower 11 out of 12 months in 2023

Non-Farm Payrolls were revised lower for 11 out of 12 months in 2023. via @HedgeyeDJ

The total job gains for 2023 was 2.7 million, the smallest annual gain since 2019 when excluding the pandemic year of 2020. It corresponds to an average monthly gain of 225K.

  • The government sector added an average of 56K jobs per month in 2023
  • Health care added 55K.
  • Leisure and hospitality added 39K jobs on average, less than an average of 88K in 2022, but employment in the sector is still 163K below its pre-pandemic February 2020 levels

Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

From The TradersCommunity News Desk