January’s US jobs report was a stunner all around, shattering the expectations of economists nationwide. Nonfarm payrolls increased by 517,000 for the month, almost tripling the Dow Jones estimate of 187,000, and the unemployment rate fell to 3.4 percent, the lowest since May 1969 (before we walked on the moon!). Many economists were encouraged by the strong numbers in 2022 but predicted that a slowdown was ont he horizon, starting with the first month of 2023.
US Travel Association President & CEO Geoff Freeman
On February 3, the US Bureau of Labor Statistics (BLS) reported that job growth was widespread, led by gains in leisure and hospitality, professional and business services, and health care. Leisure and hospitality added 128,000 jobs in January compared with an average of 89,000 jobs per month in 2022. As the chauffeured ground transportation industry can attest, leisure and hospitality was the hardest hit sector during the pandemic; however, in recent months, the sector has seen consistent growth, largely leading in gains month-over-month among other industries. However, despite the continual positive growth, according to the BLS, to date, employment in leisure and hospitality remains below its pre-pandemic February 2020 level by 495,000, or 2.9 percent. Other significant gainers were professional and business services (82,000), government (74,000), and health care (58,000). Retail was up 30,000 and construction added 25,000.
While hiring remains strong, the unexpected numbers complicate the job of the Federal Reserve to tamp down on high inflation. So far, the Fed has been using incremental increases in interest rates to try and cool off a super-heated economy, but with little effect. Fed Chairman Jerome Powell has stated that additional rate hikes are expected this year, matching levels not seen since 2006 at around 5.1 percent--but nowhere near the double-digit rates of the '80s.
US Travel Association President & CEO Geoff Freeman is encouraged by sector’s gains: “[The report]—in which 25 percent of all new jobs were added in the leisure and hospitality sector—is further evidence that travel is essential to the U.S. economy. Travel’s success is the nation’s success, and robust travel demand is supercharging our nation’s economic recovery and job growth.”
The full report can be accessed by clicking here.
[02.07.23]