US labour market shrugs off Omicron

The US economy created far more jobs than expected in January but despite the disruption to consumer-facing businesses from a surge in Covid-19 cases, pointing to underlying strength that should sustain the expansion as the Federal Reserve starts to raise interest rates.

The Labor Department's closely watched employment report on Friday also showed a whopping 709,000 more jobs were added in November and December than previously estimated. Wage gains accelerated last month and the labor pool expanded.

The upbeat report ended days of anxiety among economists and White House officials who had frantically tried to prepare the nation for a disappointing payrolls number.

"This is a strong jobs report," said Chris Low, chief economist at FHN Financial in New York.

 "The odds of quelling inflation without a recession look better today than yesterday."

Nonfarm payrolls increased by 467,000 jobs last month, the survey of establishments showed. Economists polled by Reuters had forecast 150,000 jobs would be added in January.

Estimates ranged from a decrease of 400,000 to a gain of 385,000 jobs. Employment is 2.9 million jobs below its pre-pandemic peak.

Part of the broad increase in payrolls likely reflected low layoffs after the holiday hiring season, with 10.9 million job openings at the end of December.

Though the drop in actual employment in January was in line with prior years, there were large differences at the industry level.

The government also reported that 374,000 more jobs were created in the 12 months through March 2021 than previously reported.