The U.S. economy has finally broken free of the sharp ups and downs of Covid, President Joe Biden said Friday, citing January's jobs gains.
Taken together, the combined January numbers and previous two months' revisions suggest that the record-breaking omicron wave did not have nearly the same impact on the economy as the delta wave of Covid did last summer and fall.
For January, the biggest employment gains came in leisure and hospitality, which saw 151,000 hires, 108,000 of which came from bars and restaurants. This is further evidence that omicron, which is more contagious but generally results in milder sickness than other Covid strains, didn't keep people from going out to crowded indoor venues.that nearly one in five Americans stopped going to restaurants as delta variant cases rose.
Wages also jumped in January as average hourly earnings for workers across the economy climbed 0.7% over the month and 5.7% over the last year, both the fastest rates since 2020. The White House has in recent months heralded wage gains as evidence of better bargaining power among workers and proof that corporate boards are moving toward fairer employee compensation.
Some economists and Wall Street traders say they're keeping a close eye on wage statistics as a potential leading indicator of inflation. Labor is almost always the No. 1 cost facing corporations, so higher wages could lead to steeper retail prices across the economy if firms look to offset the pay burden.
The wage and jobs numbers are also further support for the Federal Reserve's plan to begin raising interest rates and continue pulling back on Covid-era easy-money policies. The central bank is widely expected to start a cycle of interest rate hikes beginning in March that could eventually raise the cost of auto and home loans.
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