The American economy roared back in January, according to a labor market report released on Friday, paving the way for multiple interest-rate hikes by the Federal Reserve.

The Bureau of Labor Statistics said the nation’s businesses added 467,000 jobs in January, well above the 150,000 markets had expected. Most of the jobs were added in the “opening up sectors” - those most affected by the COVID-19 pandemic, like leisure and hospitality (151,000), food services and drinking (108,000), professional and business services (86,000) and retail trade (61,000). Unemployment edged higher to 4% while the December jobs report was revised upward to 510,000.

A big factor contributing to January's job gains was remote work, people working from home, or teleworking. The share of employed persons who teleworked because of the COVID pandemic rose to 15.4%.

Then there’s the rise in labor force participation, meaning that more Americans are returning to work, helping expand the economy’s potential.

The return of Americans to work sets the economy into a virtuous cycle of income and spending gains that could boost economic growth for several quarters, making the pandemic recession a distant memory for the history books.

The solid recovery in January caught some experts by surprise. Van Hesser, senior managing director at Kroll Bond Rating, is one of them.

"Today’s jobs report is a reminder that we are in uncharted waters, where powerful crosscurrents of the pandemic, easy money and stimulus continue to crash into one another,” he said. “But one key takeaway is that we are normalizing, where employers and employees alike are moving past the fatigue and frustration of the pandemic era. We are impressed with the bump in the labor participation rate, which suggests that concerns that millions of workers were leaving the workforce permanently are misplaced."

“The surge of job openings across industries is a result of the continued Great Resignation, so the recent findings are no surprise given the current job climate,” said Raul Villar Jr., chief executive officer at Paycor, a global leader in human capital management. “Looking ahead, businesses and employers nationwide must focus on strategies for both retaining and attracting top-tier talent. As we continue to reimagine what the future of work looks like, an increased emphasis on job flexibility and work-from-home policies will undoubtedly be essential.”

Meanwhile, the Federal Reserve must focus on price stability, bringing inflation under control, and that could take several interest-rate hikes, not a good development for financial markets accustomed to free money. Today’s labor market may prove to be another good news-bad news day. Good news for Main Street and bad news for Wall Street.

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