The employment report issued last Friday by the U.S. Bureau of Labor Statistics exceeded the most optimistic expectations, with topline jobs growth of 353,000 in January and upward revisions of 126,000 jobs for November and December.
The consensus projection was for a gain of 185,000. With the unemployment rate remaining at 3.7%, First Trust noted that the jobs added represented “the largest gain in a year.”
First Trust also observed:
FIGURE 1: PRIVATE SECTOR PAYROLLS INCREASED 317,000 IN JANUARY
Sources: Bureau of Labor Statistics, Haver Analytics
The White House issued a statement from President Biden regarding the jobs report, which said in part,
Even conservative talk show host Larry Kudlow, director of the National Economic Council during the Trump administration, had some positive comments:
Are there downsides to the jobs report?
Despite the overall strength of the jobs report, MarketWatch noted problematic issues that “could weaken Biden’s re-election prospects”:
First Trust’s analysis raises a related point:
Bespoke Investment Group also notes (as does MarketWatch) the divergence between two sets of numbers published by the Fed with each report: the business (establishment) survey and the household survey.
FIGURE 2: PAYROLLS SURGED IN JANUARY, BUT HOUSEHOLD SURVEY IS WEAKER
Month over month, in thousands
Sources: Bespoke Investment Group, Bureau of Labor Statistics