Jill On Money: January jobs jump
Astounding! Awesome! Boffo!
Take your pick... contrary to the negative headlines and worries about the economy, the January employment report crushed it.
The economy produced 353,000 jobs to start the year, about two times the expected result. The unemployment rate remained at 3.7 percent and importantly, average annual wages were up by 4.5%, which means that workers continue to earn more than the annual inflation rate (currently 3.4%, as measured by CPI).
One quick note about prices. If you have not received a bump in pay over the past few years, inflation has really knocked you for a loop. But according to the U.S. Treasury, wages adjusted for inflation (“real wages”) for the median worker grew 1.7% between 2019 and 2023.
“This means that one week of pay for the median worker now buys more than a week of pay did in 2019, despite higher prices.” And the best gains skewed “toward the middle class and the lower end of the income distribution.”
The January data also caught many by surprise, because there have been a number of companies that have recently announced layoffs. In parsing these headlines, it’s important to distinguish between industries that are still robust (tech) and those that are actually consolidating (traditional media).
For example, Amazon has reduced the number of total employees globally from a peak of 1.6 million in 2021, to about 1.5 million as of the end of last year. But look back to 2019 and Amazon’s workforce was just 800,000, so over the past four years, the growth has been staggering.
The same goes for Salesforce, which just announced another round of layoffs of about 10% of its workforce. Even with the cuts, the company has grown the number of employees by 30% since 2020.
Meanwhile, job reductions in traditional media could be permanent (whomp-whomp), because it is an industry that is facing major headwinds and will likely get smaller.
If you are worried about losing your job, you may want to head back to the office. According to new research, workers who are fully remote are 35% more likely to be laid off.
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