The January jobs report revealed an increase of 467,000 jobs, part of the roughly 19 million jobs added since pandemic recovery began.

If we called 2021 the “year of jobs,” the next question is, what will 2022 deliver as an encore? On Friday, the markets received the first important data of 2022—the January jobs report. Coming on the heels of the late January meeting of the Federal Reserve, you can be sure both the markets and the members of the Fed were watching closely.

So how did we do in January?  The increase of 467,000 jobs was higher than expected. The number of jobs added was disappointing the previous month, but the unemployment rate fell and the number for December was revised upward by over 300,000 jobs in this report.  In January, the unemployment rate rose slightly to 4.0%, which means that more are entering the workforce -- another good sign. The economy now has added approximately 19 million jobs since the pandemic caused a loss of 22 million in 2020. Wages grew by 5.7% on an annual basis, also stronger than expected.

Certainly, the pace of wage growth will be as important to the Fed as the growth of jobs.  The Fed has inflation in their crosshairs and their move to end their stimulus of the economy by tapering purchases of bonds and mortgages and putting rate hikes on the near-term table, is a response to the high level of inflation we have witnessed during the latter half of 2021.  Any signs that inflation is waning as we move on could ease the pace in which the Fed tightens.