US: Nonfarm Payrolls start the year with a bang – UOB

Senior Economist at UOB Group Alvin Liew reviews the recently published US jobs report for the month of January.

Key Takeaways

“The US started 2023 with a bang, exceeding all expectations with 517,000 jobs added in Jan while the jobless rate receded to a 53-year low of 3.4%, as the unemployed numbers fell by 28,000 to 5.69 million and participation rate inched up to 62.4%. Wage growth continued but the pace was in line with forecast, and slower at 0.3% m/m, 4.4% y/y (below Dec prints).”

“Wage growth further below 5% may give the Federal Reserve (Fed) some comfort the risk of wage-price spiral is not imminent, but Jan’s sterling job creation pace is likely to keep the Fed on track for further hikes in 1Q 2023. We and the markets still assign a high probability the Fed will hike rates by another 25-bps to 4.75-5.00% in 21/22 Mar 2023 FOMC.”