The January jobs report showed a slowdown in hiring pace, adding 143,000 jobs. However, the report also revised down jobs numbers between April 2023 and March of 2024 by nearly 600,000, the largest annual revision in over 15 years.
According to Austan Goolsbee, president and CEO of the Federal Reserve Bank of Chicago, the big revisions highlight the variability in the job market. “We’re just going to have to look for the through line and not overreact to any one month,” he said.
Goolsbee believes that despite the slowdown in hiring, most measures of the job market point to a stable arrangement. The unemployment rate has ticked down to 4%, and wages rose 4.1% from the prior year.
However, with inflation trending down but not quite hitting the 2% target, some experts worry about potential policy uncertainties. Goolsbee expressed concerns that proposals like deportations ramping up, immigration crackdowns, or potential tariffs on major trading partners could be inflationary.
He suggested slowing down the pace of interest rate cuts to give policymakers time to disentangle the impact of these policy changes. “You can’t just jam it and then hope it’s right,” he said.
Overall, Goolsbee remains optimistic about the economy’s prospects over the next year or so, but emphasized the need for caution in the face of uncertainty.
Source: https://www.pbs.org/newshour/show/chicago-fed-president-on-what-the-new-jobs-report-says-about-the-economy