U.S. Hiring Spree Continues, and the U.S. has added 1.1 million jobs in the past three months and stepped up hiring in January, despite rising interest rates, elevated inflation, and lingering recession fears. This growth is being driven by large, yet often overlooked sectors of the economy, such as restaurants, hospitals, nursing homes, and child-care centers.
Recovery in Service Industries
Employers in the healthcare, education, leisure and hospitality, and other service industries, such as dry cleaning and automotive repair, account for 36% of all private-sector payrolls. These service industries have added 1.19 million jobs over the past six months, making up 63% of all private-sector job gains during that time.
Tech-Heavy Information Sector Lags
The information sector, heavily dominated by technology companies, has shed jobs for two straight months, making up only 2% of all private-sector jobs. The hiring spree in everyday services indicates that the sectors hardest hit by the pandemic’s first wave are continuing to recover.
During the pandemic, workers in hotels, hospitals, and restaurants were laid off due to shutdowns and social distancing. When demand surged during reopenings, these industries struggled to land and retain enough employees, leading to burnout and quitting among workers.
Now, with the effects of the pandemic diminishing, executives and business owners in service industries say it is easier to recruit and fill jobs. For example, a Texas-based restaurant chain has seen an increase in job applications and has raised its average hourly wages to $15, from $11 two years ago.
Strong Job Growth in January
In January alone, restaurants and bars added 99,000 jobs, the healthcare industry grew by 58,000, and retailers added 30,000 jobs. The recovery from pandemic-driven job losses is expected to drive employment growth this year, particularly in healthcare, nursing homes, and child-care centers.
Lower Unemployment Rate
January’s jobs report showed that employers added 517,000 jobs, nearly triple what economists had estimated, and the unemployment rate fell to 3.4%, the lowest in more than 53 years. This stronger-than-expected report prompted some forecasters to re-evaluate their views on the economy.
Slow Economy Expected
Heading into 2023, forecasters expected the economy to slow and the labor market to deteriorate due to higher interest rates and the Fed’s campaign to control inflation. The central bank raised its benchmark interest rate by a quarter percentage point earlier this month, to a range of 4.5% to 4.75%. However, the most recent labor data is consistent with a jobs market coming back into balance after pandemic disruptions.
Leave a Reply