US Jobs Report Shows Gain of 467,000 in January, Exceeding Expectations

The U.S. added 467,000 jobs in January, widely beating economists' forecasts as employers scrambled to cope with the Omicron variant as well as an unusually tight labor market.

Bitcoin was trading slightly lower after the report, possibly because the faster-than-expected jobs growth might keep pressure on the Federal Reserve to tighten monetary conditions – seen as a negative in cryptocurrency markets.

The U.S. Labor Department's Bureau of Labor Statistics published its latest employment situation report Friday in a statement. The January number was much higher than economists' average estimate of 150,000 in a Dow Jones survey, though some economists had warned that the variability from Omicron and other data-related issues might make the latest report harder to analyze.

"Employment growth continued in leisure and hospitality, in professional and business services, in retail trade, and in transportation and warehousing," the bureau said.

Crypto traders were monitoring the report because many investors see bitcoin as a hedge against inflation, and a tighter jobs market could put upward pressure on wages – which businesses might in turn try to pass through to consumers in the form of higher retail prices.

Bitcoin was down 1% in the minutes after the report was released to about $37,500.

The number of jobs added in December was revised higher by 311,000 jobs to 510,000.

The unemployment rate was "little changed" at 4% in December, according to the report.

A hot labor market could put pressure on the Fed to raise interest rates sooner than later, as more spending could drive inflation up even higher. More pressure from the Fed could weaken bitcoin returns, according to some analysts.

“If the data suggests the Fed will need to be more aggressive with rate hikes, look out for more risk-off flow, which for the time being, will continue to have a negative impact on crypto," said Joel Kruger, market strategist at LMAX Digital.

Economists were warning even before the January jobs report came out that the data might be messy because of the unpredictable and wide-ranging impact on employers and workers from Omicron.

The count of jobs gained or lost is measured through a survey that asks employers for the number of workers they have on their payrolls during the period of measuring. That excludes workers who were out sick, or missed work for other reasons, like taking care of someone or quarantining. Those people still kept their jobs, but they weren’t accounted for in the report, which is why the number could be misleading.

The main question now is how seriously the Fed takes the data reported this month, considering the significant measurement issues and how it will affect the central bank’s decision in the upcoming weeks.

The labor participation rate, which measures the percentage of the American population that is either working or actively looking for work, was 62.6%, up from 61.9% in December.