US President Joe Biden arrives to comment on the January job report at the State Dining Room in the White House in Washington on February 4, 2022.
Leah Millis | Reuters
WASHINGTON – The U.S. economy has finally broken free from Covid’s sharp ups and downs, President Joe Biden said Friday, citing January’s unexpectedly large job growth.
The president also cited upward revisions of November and December employment data showing the economy remained strong through a dramatic rise in Covid cases.
“Our country is taking everything Covid has to throw at us, and we have come back stronger,” Biden said in remarks at the White House.
Non-agricultural wages rose by 467,000 for the month, while unemployment rose to 4%, according to the Bureau of Labor Statistics. The greater-than-expected progress came a week after the White House warned that numbers could be low due to the pandemic.
Along with the big upward surprise for January, huge revisions sent the previous months significantly higher.
December, which was originally reported as a gain of 199,000, rose to 510,000. November rose to 647,000 from the previously reported 249,000. For the two months alone, the initial counts were revised up by 709,000.
These changes brought the total in 2021 to 6.665 million, easily the largest single-year gain in U.S. history, as employers hired workers back, which they laid off during the worst pandemic.
“If you can not remember another year where so many people went to work in this country, there is a reason,” Biden said. “It never happened.”
Taken together, the combined January figures and previous two-month revisions suggest that the record-breaking omicron wave did not have nearly the same impact on the economy as the delta wave of Covid last summer and fall.
For January came the biggest employment gains in leisure and hospitality, with 151,000 employees, of whom 108,000 came from bars and restaurants. This is further evidence that omicron, which is more contagious but generally results in milder disease than other Covid strains, did not deter people from going out to crowded indoor venues.
In contrast, in August last year, the National Restaurant Association found that nearly one in five Americans stopped going to restaurants when delta varieties increased.
Wages also rose in January, as the average hourly wage for workers across the economy rose 0.7% during the month and 5.7% over the past year, both the fastest rates since 2020. The White House has in recent months announced wage increases as evidence of better bargaining power among workers and evidence that company boards are moving toward more equitable pay for employees.
Some economists and Wall Street traders say they are keeping a close eye on wage statistics as a potential leading indicator of inflation. Labor is almost always the biggest cost for companies, so higher wages can lead to steeper retail prices across the economy if companies seek to offset the wage burden.
Wage and job numbers are also further support for the Federal Reserve’s plan to start raising interest rates and continue to retire on Covid-era easy money policies. The central bank is widely expected to start a cycle of rate hikes beginning in March, which could ultimately raise the price of car and home loans.
– CNBC’s Jeff Cox contributed reporting to this story.