With 517,000 new jobs in January in US, unemployment drops to 3.45%

WASHINGTON D.C.: Despite the efforts of the Federal Reserve Bank to cool the job market to help curb record-high inflation, the US government has reported that employers added 517,000 jobs last month, as the unemployment rate dropped to 3.4 percent, the lowest level since 1969.

The report, which revealed low unemployment, relatively few firings and many job openings, highlighted the presence of a resilient US labor market that is good for workers and has accelerated wage growth and contributed to increasing inflation, due to employers’ steady demand for staff.

However, the report’s January wage data indicated that average hourly pay rose 4.4 percent last month over last year, though slower than the 4.8 percent year-over-year increase in December. From December to January, wages rose 0.3 percent, below the previous month’s increase of 0.4 percent.

Meanwhile, the government also upgraded its estimate for job gains in November and December by a combined 71,000 positions.

President Joe Biden called the jobs report "strikingly good news," stressing that his Republican critics were wrong about their warnings of ongoing high inflation and a future recession and job cuts.

"Our plan is working, because of the grit and resolve of the American worker," Biden said.

However, Seema Shah, chief global strategist at Principal Asset Management, said, "This is a labor market on heat," as quoted by the Associated Press.

Since March, the Federal Reserve Bank has raised its key interest rate on eight occasions to slow the job market and curb inflation, which hit a 40-year high last year.

However, despite some high-profile layoffs by big tech companies, such as Microsoft, Google and Amazon, most workers currently enjoy an unusual level of job security, despite predictions of an approaching recession.