Blowout Jobs Report: US Adds 517K Jobs In January, Nearly Triple Economist Expectations

The SPDR S&P 500 ETF Trust SPY traded lower Friday morning after the Labor Department reported blowout U.S. jobs market numbers from January.

What Happened: The U.S. added 517,000 jobs last month, well above average economist estimates of 187,000 jobs.

New data from the Bureau of Labor Statistics showed the U.S. unemployment rate is at 3.4%, below economist estimates of 3.6%. The labor participation rate was little changed at 62.4%, compared to the 63.4% pre-pandemic rate in February 2020.

Related Link: Why These Analysts Are Warning Investors January Stock Market Rally 'Will Not Last'

Wages were up 4.4% year-over-year and increased 0.3% from December. The leisure and hospitality industry led the job creation in January, adding 128,000 total positions.

The Labor Department also revised November's total job growth higher by 34,000 jobs to +290,000 and December's job growth higher by 37,000 jobs to +260,000.

Why It Matters: The Federal Reserve is paying close attention to the jobs market as the central bank continues its battle to bring inflation down to its 2% target range.

The Fed hiked interest rates by 25 basis points on Wednesday, bringing its target fed funds rate up to a range of 4.5% to 4.75%.

The Consumer Price Index (CPI) was up 6.5% in December, down from a 2022 peak of 9.1% in June. Following Friday's strong jobs report, the bond market is pricing in an 82.7% chance the Fed will opt for another 0.25% interest rate hike in March.

Market Action: S&P 500 futures were trading lower by less than 1% in Friday's premarket session.

Related Link: 'Talent Shortages Persist': Robert Half International CEO Warns Of Tight Global Labor Market

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