Jobs growth accelerates in January: Which industries saw the biggest payroll gains?

Leisure and hospitality led the way in January hiring

The U.S. economy added jobs at a surprisingly rapid pace in January, with restaurants and bars leading the way in hiring as consumers brushed off a record-breaking spike in COVID-19 infections. 

The Labor Department said in its monthly employment report released Friday that payrolls in January rose by 467,000, easily topping the 150,000 jobs gain forecast by Refinitiv economists. The unemployment rate, which is calculated based on a separate survey, ticked up slightly to 4%. The increase is largely because the labor force participation rate climbed to 62.2%, the highest level since the pandemic began in February 2020.


"The January jobs report sidestepped weaker projections brought on by omicron concerns to post another month of strong hiring," said Ben Ayers, Nationwide senior economist. "Job growth was surprisingly strong across service industries where omicron concerns were expected to be most impactful. Leisure and hospitality, retail trade and transportation and warehousing areas all saw solid growth in January."

Leisure and hospitality, one of the hardest-hit sectors during the pandemic that has become a bellwether of sorts for the recovery, saw a gain of 151,000 new jobs last month. Restaurants and bars saw an increase of 108,200, while hotels added 22,600 jobs last month. In all, employment in the sector is down by about 1.8 million, or 10.3%, since February 2020.

Professional and business services also accounted for some of the biggest gains last month, with payrolls jumping by 86,000. The increases were widespread across the industry: Computer systems design and related services rose by 14,800, architectural and engineering services was up by 8,400 and management and technical consulting services was up by 15,700. Employment in the industry is actually 511,000 jobs higher than it was in February 2020. 

Transportation and warehousing contributed more jobs to the payroll report last month, with employment in the industry rising by 54,000 in January. Gains were spread throughout the sector, with gains in warehousing and storage (up 13,000), trucking (up 8,000) and air transportation (up 7,000). 

"All four of these component industries have surpassed their February 2020 employment levels, with particularly strong growth in warehousing and storage (+410,000) and couriers and messengers (+236,000)," the report said.

A flier at the Pasadena Community Job Center

A flier at the Pasadena Community Job Center during the coronavirus pandemic in Pasadena, Calif., May 7, 2020. (AP)

Employment in other industries, including information (18,000), wholesale trade (16,400), health care and social assistance (16,400), manufacturing (13,000) and financial activities (9,000) also rose last month.


Just two sectors shed jobs in January: mining and logging, which declined by 4,000, and construction, which fell by 5,000.