What to look for in Friday’s jobs report

By Alicia Wallace, CNN
Updated 9:17 AM EST, Thu February 2, 2023

Minneapolis CNN — A week that has been chock-full of economic data will be capped off Friday with the first US jobs report of 2023. ... Economists estimate that 185,000 positions were likely added in January, according to Refinitiv.

That would be a considerable drop from the 504,000 jobs added in January 2022 and the 520,000 added in January 2021. It also would nearly match the 183,000 monthly average between 2010 and 2019, Bureau of Labor Statistics data shows.

And yet, while the Federal Reserve’s aggressive rate hikes have helped make a dent in inflation and resulted in slower economic activity without stark rises in unemployment, the full effects have yet to come, Fed Chair Jerome Powell warned Wednesday. ... “I would say it is a good thing the disinflation we have seen so far has not come at the expense of a weaker labor market,” Powell said in a news conference following the Fed’s first monetary policymaking meeting of the year. “But I would also say the inflationary process you see under way is really at an early stage.”

America’s unemployment rate dipped back down in December to 3.5%, once again matching a 50-year low. It’s expected to tick up to 3.6% come Friday.

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MARKET INSIDER

January job growth is forecast to slow slightly, but the impact from big corporate layoffs is uncertain

PUBLISHED THU, FEB 2 20234:37 PM ESTUPDATED THU, FEB 2 20235:04 PM EST

Patti Domm
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KEY POINTS
• Payroll growth is expected to have slowed to 187,000 new jobs in January, from 223,000 in December.
• But some economists, like those at Goldman Sachs, expect the employment report Friday morning could show more jobs than consensus because it is unclear how much companies are actually laying off workers.
• “Businesses are doing their best to hold on to as many jobs as they can...I think they’re really looking to shed workers though attrition, people quitting, people retiring,” one economist said.

Economists expect slightly slower, but still strong job growth in January, while the impact of corporate layoff announcements is unclear. ... According to Dow Jones, the consensus forecast calls for 187,000 new nonfarm jobs in January, down from 223,000 that were created in December. The employment report will be released at 8:30 a.m. ET Friday.

The unemployment rate is expected to edge higher, to 3.6% from 3.5%. Average monthly wage growth is expected to have stayed at about 0.3% in January, while declining on an annual basis, to 4.3% from 4.6%.

Across major technology companies, including Alphabet and Facebook, there have been layoff announcements affecting tens of thousands of workers. Other non-tech firms have also announced staff reductions recently, including FedEx, Dow and Hasbro. But economists say it’s not clear how much of that will show up in the labor numbers.

Tom Simons, money market economist at Jefferies, expects 260,000 jobs were added in January, but he said the number could be even higher.

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