Economic Report: U.S. likely added 187,000 jobs in January, but watch out for this wild card

by | Feb 2, 2023 | Stock Market

The creation of new U.S. jobs likely slowed in January for the sixth month in a row, but a historically tight labor market has shown lots of resilience even as the economy weakens. But how long can it last? Here’s what to watch in the January employment report on Friday morning, including a potential wild card.

Wall Street forecast The U.S. likely added 187,000 new jobs in January, compared to 223,000 in the final month of 2022, according to economists polled by The Wall Street Journal. If so, it would be the smallest increase in just over two years. The big question is, is it slow enough for the Federal Reserve? In a word, no. Fed Chairman Jerome Powell has said the economy only needs to add about 100,000 new jobs a month to soak up all the new workers entering the labor force. Anything more than that is seen as contributing to upward pressure on wages as businesses compete for labor. The Fed worries that persistently strong wage gains could make it harder to get high U.S. inflation under control. “Job growth slowed over 2022 but ended the year still well above its pre-pandemic pace,” noted Gus Faucher, chief economist at PNC Financial Services.Revisionist history The January jobs report also has the potential to rewrite the current view of the labor market. Every ye …

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