The first employment report of 2023 certainly surprised everybody.  While economists were expecting an increase of 188K non-farm payrolls, the actual reading came in at 517K, exceeding expectations by 329K.  Going back to 1998, that was the fifth-largest beat relative to expectations and the strongest since last January’s Non-Farm Payrolls report (hence the commentary that seasonal adjustments are a factor in the large beat).  While January’s report was ‘only’ the fifth strongest relative to expectations going back to 1998, all of the larger beats have come in the post-pandemic period, so COVID has obviously skewed things and in many cases to a large degree.  What we can tell you is that Friday morning’s report was the tenth straight better-than-expected report which is a record and easily surpasses the prior peaks in September 2020 and March 2015.

Looking at the pace of job creation over the last year, the US economy has added 4.967 million jobs in the last twelve months, and while that’s well off the peak from prior readings in the last two years, it still remains extremely elevated relative to history.  Prior to COVID, for example, the peak total of job creation over a rolling 12-month period was 3.37 million, or just under 1.6 million below current levels. Click here to learn more about Bespoke’s premium stock market research service.