Editor's note: The following article and chart are from 2023.
January jobs exceeded expectations, arousing suspicion from some economists. The breakdown? 517,000 jobs and a 3.4% unemployment rate. January jobs were roughly twice those added in December, as the chart below reflects. Unemployment is at a trough not seen since 1969.
Some are skeptical of the employment surge, noting that seasonal factors, government benchmarking, and population control adjustments might be inflating January’s numbers. Others seem to think the January data is a “clean read:” employment gains are strong across all industries. Labor hoarding might be at play, with employers eager to retain those they struggled to hire during Covid-19.
Labor market data will be a key indicator for the Fed, which views a tight labor market as an inflationary pressure. January and February data will be critical watch before the Fed meets again in March.
Source: Molly Smith, Bloomberg
Reade Ben is a policy analyst at the Manhattan Institute.
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