A gigantic jobs report for January coupled with recent lowered inflation numbers means the Biden Boom is rolling on.
The number of new jobs created in January rose by 517,000 to mark the biggest increase in six months, suggesting little erosion in a dynamic U.S. labor market even though the economy has show lots of signs of weakening.
One caveat: The government’s formula to adjust for seasonal swings in hiring sometimes exaggerates employment levels in January. It’s unclear whether that was the case last month.
Yet employment grew even faster in the waning months of 2022 than previously reported, indicating the labor market is still quite robust.
The unemployment rate, meanwhile, slid to a 54-year low of 3.4% from 3.5%, the government said Friday. That’s the lowest level since 1969.
Hourly pay rose a modest 0.3% for the second month in a row, reflecting the smallest back-to-back gains in almost two years.
The increase in pay over the past year also slowed again to 4.4% from 4.8%, indicating some relaxation in wage pressures. The Federal Reserve has been worried that rapidly rising wages could make it harder to bring down high inflation.
U.S. stocks DJIA, -0.11% SPX, +1.47% fell in premarket trades and bond yields rose after the report.
Economists polled by The Wall Street Journal had forecast an 187,000 increase in new jobs last month.
Big picture: The economy is slowing and the threat of recession is rising as higher interest rates depress growth. Many large companies such as Amazon AMZN, +7.38%, IBM IBM, +0.96% and Fedex FDX, +6.13% have announced layoffs and more job cuts are expected.
Yet the economy has also proven quite resilient and lots of businesses are reluctant to fire workers given how hard it was to hire them in the first place. The U.S. might even be able to avoid a recession if job losses remain on the low side.
With revisions, the jobs numbers were three times the expectation. Even if adjustments were off by 100k or even 200k, it's still a rocket-powered jobs report.
And record-low 3.4% unemployment? Yeah, Biden did that. I don't know where this "recession" is going but people need to stop calling it that, because we're not in one.
Post a Comment