U.S. added 517,000 jobs in January, blowing away forecasts

(CBS NEWS) — Employers added a stunning 517,000 jobs in January, indicating the job market remains red-hot despite rising layoffs in the technology industry and the Federal Reserve’s concerted push to slow economic growth.

The figure, released on Friday by the Department of Labor, far outpaced economists’ expectations of about 185,000 jobs to be added in January.

The nation’s unemployment rate ticked down to 3.4%, its lowest level since 1969.

“The robust 517,000 gain in non-farm payrolls in January means that, despite most leading indicators of recession flashing red, the economy is clearly not as close to recession as we had suspected,” Andrew Hunter, senior U.S. economist with Capital Economics, said in a report.

The government also revised estimates for 2022 to show that the economy added 568,000 more jobs than initially estimated.

The leisure and hospitality sector led January’s payroll gains, adding 128,000 jobs, followed by professional and business services with 82,000 and health care with 79,000. The payroll gains were padded by a large gain in government jobs, partly due to an end to a strike at the University of California that had seen 48,000 walk off the job.

Employment in the information sector, which contains many technology companies, fell by 5,000, equal to its decline in December. Many large tech companies have been cutting headcount, with high-profile layoffs at Amazon, Alphabet, Meta and Microsoft.

“We’re still in a very strong, tight labor market. The demand for workers remains high,” John Leer, chief economist at Morning Consult, told CBS MoneyWatch before the job numbers were released.

“While the tech sector does play an outsized role in driving productivity and corporate earnings, it remains a fairly small share of total employment,” he added. “For all these folks that are being fired, many of them are being re-hired, reabsorbed elsewhere.”