Thread by @bencasselman

WOW: U.S. employers added a whopping 517,000 jobs in January. The unemployment rate fell to 3.4%, the lowest since 1969.
Data: bls.gov/news.release/e…
Full coverage: nytimes.com/live/2023/02/0…

November/December both revised up, by combined 71k. That's separate from the benchmark revisions throughout 2022.

Average earnings up 10 cents/hour. Up 4.4% over the past year. Unlike everything else in the report, that's consistent with a continued gradual cooldown.

The story in the job market had been "gradual cooldown but surprising resilience." This report, taken on its own, paints a very different picture: all the resilience, none of the slowdown.

Still, even (or maybe especially) when we get big surprises like this, it's important to keep the bigger picture in mind. This has been an exceptionally strong rebound from the pandemic losses, but employment is still below where we'd have been had job growth continued unabated.

The benchmark revisions make the recovery look *even stronger* than it already did. Although note this does not incorporate QCEW data from last spring that suggests some weakness.

The unemployment rate fell to 3.4 percent in January. That's the lowest it's been since 1969.

Interesting to look at the benchmark revisions by sector. Large upward revisions to leisure, professional services and transportation/warehousing. Retail and government revised down.

Looking over the full pandemic period, leisure and hospitality are still down, but by roughly half previous estimate. Retail flips from small positive to small negative. Warehousing even stronger than believed.

Sort of a mixed picture on inflation in this report. On the one hand, hourly earnings continued to cool a bit on both a month-over-month and year-over-year basis (though the January slowdown is partly because December was revised up).

On the other hand, big gains in both jobs and hours worked means that total labor income jumped back up. That's what matters for aggregate spending.

Worth noting that there was a big gain in state and local government jobs because of University of California workers returning from a strike. (Although private sector gain of 443k is nothing to sneeze at!)