The leisure and hospitality industry added 151,000 jobs in January, accounting for nearly a third of all positions added to the U.S. economy, according to government figures released Friday.
The robust performance has eased fears that the Omicron variant would prevent people from returning to the labor market and significantly slow economic activity.
A strong January follows a strong 2021, when job growth averaged 555,000 hires each month, a total that now reflects recent upward revisions. The labor market is “even stronger than we thought,” Mike Fratantoni, chief economist at the Mortgage Bankers Association, said in a statement.
Restaurants and bars added 108,000 jobs while hotels and accommodation added 23,000, although both sectors remain hampered by the pandemic.
Some 2.9 million fewer people are working in the United States than before the pandemic, with the leisure and hospitality industry accounting for 62% of that gap, or 1.8 million workers. Last week, a 42-story luxury hotel in Times Square once valued at $2.4 billion was auctioned off in a foreclosure process less than three years after it opened.
Other industries important to real estate gained ground.
Retailers hired 61,000 people last month. Total construction employment fell, but more workers were hired for residential construction. The warehousing and storage industry, star of Covid, now employs 410,000 more people than before the pandemic.
Hourly wages rose last month for an annual increase of 5.7%, while consumer prices rose around 7% in 2021, “meaning that the purchasing power of workers remains limited” , said Fratantoni.
With unemployment still low at 4%, the Federal Reserve is set to raise interest rates in March, making borrowing less affordable. As a result, the economy should grow at a slower pace, which would slow down inflation.