Biden’s administration was happy to see the positive jobs report, as it had been expecting less favorable numbers.

President Biden said Friday that America is now back at work. “Our country is taking all that COVID throws at it and we’ve come home stronger.”

Although the unemployment rate rose to 4.4% in January, from 3.9% in the previous month, this was due to the fact that nearly 1.4million people have entered the labor market.

Employers who struggle to fill job vacancies have seen a decrease in their workforce. This could be a sign of relief.

Elise Gould (senior economist, Economic Policy Institute) stated, “As it becomes safer, fewer people get sick, they can take part more fully in the labour market and we will see that return.”

Just as omicron infections were at their peak, the monthly job count was done in January’s second week. The number of daily infections was nearly seven times higher than when jobs were counted in December.

Stronger job gains expected

Some employers were discouraged from hiring workers last month by the omicron wave, but some workers remained on the sidelines. However, the impact was less than anticipated.

Cecelia Rouse, White House economic adviser, said that “we have an economy which is learning to continue functioning even in the face wave such as omicron”.

Although January saw 467,000 new jobs, it is a slight slowdown from December when more than half a billion jobs were added by employers. The spike in omicron infection has begun to diminish, despite being severe.

After peaking at 800,000 just two weeks ago, daily infections fell to 500,000 this week.

Employers want to hire more workers. Nearly 11 million jobs were still available at December’s end, according to the Labor Department. ADP surveys show that a significant number of employers intend to hire workers in the next six-months.

“All of these data suggest that the recovery from Omicron could be quick as the spread is contained,” Nela Richardson (ADP’s chief economist) said.

However, the outlook for the labor market will remain dependent on the outcome of the pandemic.

Changes in the public’s health outlook can influence demand for workers, especially in businesses like restaurants that depend on personal contact with customers. Last month, restaurants and bars added 108,000 new jobs.

A tight job market results in higher wages and higher prices

A shortage of workers has sometimes hampered the economic recovery. Millions of people quit looking for work or stopped working when the coronavirus struck the U.S. nearly two years ago. Some would-be workers have not returned to work as the pandemic drags on.

Federal Reserve Chairman Jerome Powell said last week that there is still a large pool of people who could return to the workforce, but it’s not happening quickly.

As they try to attract workers with high-skilled skills, employers have offered better wages and benefits. In January, private sector wages were 5.7% higher than a year ago. However, some employees saw wage increases as high as 13%.

Millions of workers are also leaving their jobs in search of better opportunities. Increasing wages and higher prices have been caused by a shortage of labor and increased turnover.

This is one reason why the Fed plans to increase interest rates to try to control inflation. December’s consumer prices were up 7% compared to a year earlier — the largest increase in almost 40 years.