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United States Unemployment January 2024

United States: Job gains smash market expectations in January

Total non-farm payrolls grew by 353,000 in January, up from December’s upwardly revised 333,000 gain and close to double market expectations. Job gains occurred in professional and business services, health care, retail trade, and social assistance.

The unemployment rate came in at December’s 3.7% in January, while annual wage growth ticked up to 4.5% (December: +4.3% yoy).

All in all, the figures show that the labor market remained in good shape at the start of 2024, which should have provided support to private consumption going into the new year.

On the monetary policy implications, Nomura analysts said:

“The combination of strong sequential [payroll] growth and positive revisions significantly reduces the likelihood of a March rate cut. We expect some lingering strength in wage growth, but this report is unlikely to mark a true acceleration. We maintain our view that a gradual disinflation will allow the Fed to ease 100bp this year, beginning in May.”

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