January jobs report: Here's what to expect
The U.S. economy is expected to have added 165,000 jobs in January, down sharply from the much larger-than-anticipated 312,000 created in December.
The Department of Labor will release payroll data early Friday morning - on the heels of a 35-day government shutdown - which will offer an in-depth evaluation of the labor market, including job additions, unemployment rate, wage growth and labor participation rate.
“The monthly average over the previous three months has been an impressive 254,000 jobs added,” said Mark Hamrick, the chief economist for Bankrate.com. “Don’t be surprised if we see something less robust. That doesn’t necessarily signal a dramatic change in the trend for the job market or the U.S. economy.”
In December, the unemployment rate climbed slightly higher to 3.9 percent, although it’s still one of the lowest rates in nearly 50 years. Most analysts expect that number to remain steady in January.
Wall Street will also be closely watching wage growth for potential signs of inflation; average hourly earnings are expected to rise 3.2 percent from the year-ago period, the same as last month, according to analysts surveyed by Refinitiv (formerly Thomson Reuters).
Last week, a significant drop in the U.S. jobless claims prompted Larry Kudlow, President Trump’s chief economic adviser, to suggest January could end up being another blowout month for job creation. At the time, the number of Americans filing applications for jobless benefits plummeted to 199,000, a nearly 50-year low.
“It suggests very strongly that the jobs report for January will be up,” Kudlow said during a Fox News interview. “And it may be up a significant amount.”
Since then, however, jobless claims surged to a one-and-a-half year high..
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Initially, the White House was bracing for a potentially negative jobs number in January when the Department of Labor releases the payroll data. However, U.S. labor officials said last week they would count the once-furloughed workers as employed because they’re getting paid retroactively once the government is up and running again.