What to Expect from Friday’s Jobs Report: A Comprehensive Analysis
The U.S. employment report for January is set to be released on Friday, and economists are expecting a continuation of the job creation streak that has been ongoing since January 2021. According to a survey of economists by Bloomberg Finance, the economy is likely to have added 150,000 jobs in January, down from the surprisingly high 256,000 added in December.
Key Takeaways
1. Job creation streak: The U.S. employment report is expected to show that the economy has added jobs for the 25th consecutive month.
2. Resilient labor market: Despite high interest rates and a slowdown in hiring, the labor market has remained resilient, with layoffs scarce and consumers continuing to spend.
3. Uncertainty surrounding Trump’s economic policies: The trajectory of the job market could depend on President Donald Trump‘s economic policies, including tariffs, which could potentially derail further growth.
Analysts’ Expectations
Economists are expecting the January jobs report to show a slowdown in hiring, but still a healthy rate of job creation overall. The unemployment rate is expected to remain low, with only 207,000 people filing for jobless claims last week, according to the Department of Labor.
The Impact of High Interest Rates
High interest rates, meant to slow the economy and corral inflation, have made it costlier for businesses to hire and expand over the past few years. However, despite these challenges, layoffs have remained scarce, and consumers have continued to spend.
The Role of Trump’s Economic Policies
A wild card in the employment picture is Trump’s economic policies, including tariffs, which could potentially spark trade wars and hurt employment. However, forecasters are uncertain about how big the hit will be, as Trump has yet to announce the scope, size, or duration of his planned tariffs.
Conclusion
In conclusion, the January jobs report is expected to show a continuation of the job creation streak, despite a slowdown in hiring. The labor market has remained resilient, with layoffs scarce and consumers continuing to spend. However, uncertainty surrounding Trump’s economic policies, including tariffs, could potentially impact the trajectory of the job market.
Recommendations
1. Investors should keep a close eye on the January jobs report: The report will provide valuable insights into the state of the labor market and the impact of high interest rates.
2. Analysts’ expectations should be monitored: Economists are expecting a slowdown in hiring, but still a healthy rate of job creation overall.
3. The impact of Trump’s economic policies should be closely watched: The tariffs and other economic policies proposed by Trump could potentially impact the trajectory of the job market.
Appendix
– The January jobs report will provide valuable insights into the state of the labor market and the impact of high interest rates.
– Analysts’ expectations suggest a slowdown in hiring, but still a healthy rate of job creation overall.
– Trump’s economic policies, including tariffs, could potentially impact the trajectory of the job market.
Glossary
– Labor market: The market in which workers supply labor and employers demand labor.
– Interest rates: The cost of borrowing money, which can impact the economy and the labor market.
– Tariffs: Taxes on imported goods, which can impact trade and the economy.
References
– Bloomberg Finance survey of economists.
– Department of Labor data on jobless claims.
– Pantheon Macroeconomics report on the labor market.
EXCERPT
What To Expect From Friday’s Jobs Report Key take aways The U.S. employment likely added 150,000 jobs in January, continuing a streak of job creation going back to January 2021.
Although hiring has slowed down since the post-pandemic boom of 2022, the job market has stayed resilient, and employers have avoided layoffs.
The trajectory of the job market could depend on President Donald Trump’s economic policies, with tariffs possibly derailing further growth.U.S. employers likely slowed hiring down in January, but still added jobs at a healthy rate overall, if forecasters are correct.
A Bureau of Labor Statistics report on employment Friday is likely to show the economy added 150,000 jobs in January, down from the surprisingly high 256,000 added in December, according to a survey of economists by Bloomberg Finance, reported by Wells Fargo.1 The economy has added jobs every month since December 2020.2
Should the report match expectations, it would highlight the resiliency of the labor market so far, even as high interest rates from the Federal Reserve, meant to slow the economy and corral inflation, have made it costlier for businesses to hire and expand over the past few years. Despite interest rates near their highest in decades for credit cards, mortgages, and other loans, layoffs have remained scarce and consumers have continued to ramp up their spending.
Only 207,000 people filed for jobless claims last week, according to the Department of Labor, a figure similar to pre-pandemic levels and not indicating any serious weakness in the labor market.3 Still, employers have pulled back on job openings dramatically since 2022, leaving the labor market in an uneasy “low hiring, low firing” limbo that some economists see as a potential precursor to increasing layoffs down the road.
What’s Trump Got to Do With It?Economists at Pantheon Macroeconomics, for example, predict the unemployment rate will rise throughout the year as high interest rates continue to bite and Donald Trump’s administration pares back the size of the federal government, which employs about 2% of all workers in the country.
A wild card in the employment picture is Trump’s economic policies. Trump has promised to impose tariffs on foreign trade, which could spark trade wars and hurt employment. However, forecasters are uncertain about how big the hit will be since Trump has yet to announce his planned tariffs’ scope, size, or duration.
Source: Invetopedia
