- The hugely positive January jobs report hints the US could recover all its lost jobs by July.
- The economy added an average 541,000 jobs every month since November, hinting Omicron did little to slow hiring.
- The recovery is also running three times faster than that seen after the Great Recession.
Until early Friday morning, economists expected the Omicron variant to have slammed the brakes on the hiring recovery. The January jobs report not only proved them wrong, but placed a full labor-market recovery even closer on the horizon.
The Friday release showed the US economy adding 467,000 nonfarm payrolls in January, blowing the median forecast of 150,000 new jobs out of the water. Labor force participation ticked higher as more people entered the workforce, and average hourly earnings rose more than expected. By nearly every measure, the report showed the jobs recovery thriving through January.
Prior months' figures improved as well. Revisions for November and December job growth added another 709,000 payrolls, revealing hiring was far stronger than preliminary data suggested. That helped lift the three-month average for monthly job growth to 541,000 payrolls, and should that pace continue, the US will return to its pre-pandemic job count by July.
January data suggests that pace can hold, if not improve further. The report's survey period covered the peak of the Omicron wave, when daily infections peaked at more than 1.4 million. Many economists expected the US to shed payrolls through the month due to record-high case counts, making the increase even more encouraging. With infections now steadily declining, the biggest headwind for the hiring recovery is fading away.
To be sure, both December and January's payroll gains are set to be revised in the February jobs report. And recouping every job lost during the pandemic still only brings the US payroll count to where it was in early 2020. It will take longer still to make up for the potential job growth that would've happened had the pandemic not slammed the economy.
Recouping every lost job is only one part of a complete labor-market recovery, too. While labor force participation improved in January, it's still well below pre-pandemic levels and has recovered at a far slower pace than other measures of workforce health. Unless many more Americans come off the workforce's sidelines and seek jobs, the economy won't return to the same strength it enjoyed two years ago.
Even if it takes longer for the labor market to fully recover, it's all but certain to outpace the last rebound. It took 76 months for the economy to reverse the drop in payrolls from the Great Recession. The US is currently on track to achieve the same feat in 29 months, Insider calculated.
The January report also showed nonfarm payrolls just 1.9% below the pre-recession high after 23 months of recovery. By comparison, it took 63 months for the economy to reach that point after the financial crisis. The drop in nationwide payrolls was also more than twice as deep as that seen in 2007.
Where the late 2000s saw a plodding recovery, the rebound from the pandemic is set to be among the fastest in US history. The boom seen through 2021 isn't over yet.