The year is starting off to a bang. January job growth beat expectations by 3x, rising 467,000 versus the predicted 150,000 jobs. And, just to add to that, December's numbers were significantly revised upwards, moving from the previously reported 199,000 to a much-healthier 510,000 non-farm payroll jobs.

Omicron does not seem to have had as much of an impact as delta did. Job growth in leisure and hospitality industries remained positive for January, with payrolls rising by 151,000 compared to the 163,000 brought back in December. Retail trade payrolls accelerated to see a rise of more than 60,000 jobs in January from the 40,100 in December. November was also revised, with the total for the December and November moving to 709,000.

The results were at odds with Wednesday’s ADP report, which predicted a loss of 200,000 jobs. The Biden administration had been suggesting it would be a weak release. They have to be pleased. These revisions mean the economy added 6.6 million jobs during Biden's first 12 months in office, making it the best first year for a president ever.

Wages are also up, rising 0.7% for the month and 5.7% for the year.

“The benchmark revisions helped the numbers a bit just because it moved out some of the seasonal factors that have been at work. But overall the job market is strong, particularly in the face of omicron,” said Kathy Jones, chief fixed income strategist at Charles Schwab. “It’s hard to find a weak spot in this report.”

Employers Desperate to Hold on to Workers

There is a bit of a fly in the ointment. As pointed on in an analysis by Axios, there are signs that employers are holding on to workers more tightly that in prior periods.

Some of the biggest job gains were in categories that have strong seasonal patterns, normally adding workers in the fall and then cutting those temporary workers in January.

• But employers, desperate for staff, appear to have held onto those workers in greater numbers than in a normal year.
• Due to the statistical process of seasonal adjustment, "cutting fewer workers than usual for this time of year" gets translated as "adding lots of jobs."

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