Executive summary
U.S. payrolls rose by 143,000 in January. However, upward revisions to the prior two months added 100,000 more jobs than previously reported, pushing the six-month average up to 177,700. That matches the pre-COVID three-year average of 177,000.
Also, the unemployment rate slipped to 4.0% as the number of unemployed has declined since the summer. Meanwhile, wages and the labor force participation rate bumped higher. Hours worked revisited their pandemic low point, which might be the only dampener within this report.
We have repeatedly noted that labor market conditions were cooling but not weak. This report reflects a solid U.S. economy, which is buoyed by resilient consumers. It also supports the case for the Federal Reserve (Fed) to maintain it’s ‘wait & see’ approach to additional rate cuts in the near term, though there are many other factors in determining monetary policy, most glaringly, the path of inflation.
