An ‘astonishingly strong’ jobs report surprised economists. Here’s what it means for the Philly job market

New job market data released Friday surprised economists, who saw many more jobs added to the U.S. economy in January than they expected.

Employers added 517,000 jobs in January, and the unemployment rate fell to 3.4%, the lowest level since 1969, according to data from the U.S. Bureau of Labor Statistics (BLS). CNN touted the report as “astonishingly strong.”

BLS also revised its reports for November and December 2022, finding more jobs were added than previously reported, according to data released Friday.

So what does that mean for workers in the Philadelphia area?

Even as layoffs at well-known companies have dominated headlines in recent months, the unemployment rate nationally hasn’t changed much since early 2022.

It’s also worth noting that the layoff rate nationally has been low since 2021, and remains low. National data showed the layoff rate stayed at 1% in December — meaning that only 1% of workers were laid off from their jobs. This is generally considered to be a very low rate. Translation: It’s still challenging for employers to fill open roles and workers have a lot of options.

That’s despite headline-grabbing workforce cuts at Meta, Twitter, Amazon, and other tech giants in November and December. Even with those jobs lost, the information sector as a whole had 5,000 fewer jobs in January than December, which BLS said described as a small change.

But it’s also worth mentioning the number of people working and seeking jobs is still lower than it was before the COVID-19 pandemic. This is measured by the labor force participation rate, which was 62.4% in January, vs. 63.3% in February 2020. That suggests there are people who stopped working during the pandemic and haven’t decided to look for a new job.

January unemployment data for the state and metropolitan area won’t be available until March, so the stats above can’t be broken down locally right now.

But this region seems to be experiencing similarly low unemployment.

The most recent local data shows an unemployment rate of 3.8% for the Philadelphia region and 3.9% for Pennsylvania, both as of December 2022. For Pennsylvania, that was an all-time low.

Pennsylvanians continued to file notices of unemployment in recent weeks, which is the step they must take in order to get unemployment compensation. The state Department of Labor and Industry tracks the number of those applications weekly.

In Philadelphia and the surrounding Pennsylvania counties, the average number of weekly claims has been inching up from October to January, according to state data. Statewide, average weekly initial unemployment claims jumped from November to December, and stayed steady from December to January.

But don’t get nervous about the uptick.

A spokesperson for the state Department of Labor and Industry said an uptick in unemployment initial claims is typical in December and January because of seasonal changes. For instance, people in certain outdoor jobs are unable to work in cold weather and are likely to file for unemployment in the winter.

Officials at the Federal Reserve have been watching jobs numbers nationally as they figure out how to slow down the rapid inflation U.S. consumers have been facing (also known as the reason your eggs cost nearly double what they did this time last year). The economic trend that causes higher prices on goods and services goes hand-in-hand with high demand for labor.

While job growth continued last month, wages didn’t increase as much as they did in December and inflation slowed somewhat.

Still, it’s not enough. The Federal Reserve said earlier this week that it will continue to raise interest rates until it sees inflation come down to more normal levels. Those interest rates affect the cost of borrowing money, such as a mortgage on a home. It also determines the cost of borrowing for companies, and that often affects decisions on how many people they can employ.