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January Jobs Report Shock: 467,000 New Jobs Added, Big December Revision; Wages Surge

A massive beat for January jobs gains, as well as a big revision for the December tally, has Fed rate bets accelerating and stocks moving lower Friday.

Updated at 11:38 am EST

The U.S. economy added far more new jobs than forecast last month, the Labor Department said Friday, with a big revision for its December reading, adding even more fuel to the Federal Reserve's hawkish outlook on rates and inflation

The Bureau for Labor Statistics said 467,00 new jobs were created last month, with headline unemployment rate rising from a post-pandemic low to 4%. The January tally was firmly ahead of the Street consensus forecast of 150,000.

The BLS also revised its December jobs addition estimate to a whopping 510,000 from its original estimate of 199,000.

The BLS noted that hourly wages were up 0.7% in January, and 5.7% on the year, to $31.63 per hour, with the year-on-year reading coming in well ahead of Street forecasts. 

The jobs report points to the underlying strength of the economy, even in the face of January's omicron surge," said Julian Koski, chief investment officer of Rye, New York-based asset manger New Age Alpha. "It also strengthens the Federal Reserve's argument that the economy is strong enough to withstand tighter monetary policy this year."

With investors betting on either faster, or more, near-term rate hikes from the Federal Reserve, the Dow Jones Industrial Average was marked 150 points lower in late-morning trading while the S&P 500 fell just 1 point from last night's close. The Nasdaq Composite fell 55 points.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.1% higher at 95.479 while benchmark 10-year Treasury note yields jumped to 1.912%.

Earlier this week, Payroll processing group ADP said in its National Employment Report, which it compiles with Moody's Analytics, that the economy lost 301,000 private sector jobs last month, a surprising figure that shocked analysts looking for a 200,000 gain. 

The Labor Department's Job Openings and Labor Turnover Survey for the month of December, known as JOLTS, showed a modest decline in the national 'quit rate' but still indicated that nearly 11 million positions remained unfilled.