January jobs report: Are the numbers as solid as they seem?
The January jobs report is blazing a trail into 2024, posting 353,000 non-farm payroll jobs added to the US economy in that month.
New York Life Investments Economist and Chief Market Strategist Lauren Goodwin and ZipRecruiter Chief Economist Julia Pollak sit down with Yahoo Finance to weigh in on the unemployment print's strength and also why the data may not be as solid as it appears.
"We added 3.1 million jobs over the year. that's kind of a blockbuster number, up from previous estimates of 2.7 million," Pollak states. "That said, there is a caveat on all the numbers, which was that the household survey was negative in both December and January, and over the year it only shows 1.9 million gains. So much, much weaker."
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
JULIE HYMAN: All right, let's get to what's going on with the jobs data as well. Of course, that's the other big driver of the market today showing the economy continues to strengthen. But could this mean that interest rates will stay higher now for longer?
Let's welcome in Lauren Goodwin, New York Life Investments economist and chief market strategist, and Julia Pollak, ZipRecruiter chief economist. Julia, I want to start with you here because we've sort of been puzzling through this all day long why it was so good and why it was so unexpectedly good. Is there something about this job market that is just uniquely difficult to predict, Julia?
JULIE POLLAK: I think it is. I mean, one of the reasons is that the labor market is no longer as seasonal as it was before the pandemic. But December and January came in much stronger than expected, well above trend. Job growth also broadened across industries.
And then with these benchmark revisions, 2023 turns out to have been a much stronger year in the labor market than initially reported. We added 3.1 million jobs over the year. That's kind of a blockbuster number up from previous estimates of 2.7 million.
That said, there's a caveat on all those numbers, which is that the household survey was negative in both December and January. And over the year, it only shows 1.9 million gains so much, much weaker.
JARED BLIKRE: Lauren, maybe you could touch on this, but first I want to get your big picture thoughts about just the blowout number we saw at least on the headline number this morning in payrolls.
LAUREN GOODWIN: I mean, Julia, is exactly correct. This is a really strong number not only from the headline perspective, but also in terms of the unemployment rate remaining stable and wage growth being so strong. My main takeaway from an investor's perspective, and even from the Fed's perspective, is that this is a challenging number for corporate profit margins.