The US labor market likely began 2025 in solid fashion, with January’s nonfarm payrolls projection showing growth of 169,000, down from 256,000 in December but nearly in line with the three-month average. The unemployment rate is expected to remain at 4.1% according to the Dow Jones consensus.
While job creation may be slowing, experts say the employment picture remains stable and unlikely to concern the Federal Reserve soon. Chief economist Joseph Brusuelas of RSM believes the labor market is at full employment, with a good problem to have, citing low inflation and firms’ comfort with sustained investment.
Recent indicators show hiring has leveled off, but layoffs aren’t increasing, and workers aren’t quitting. However, job openings are on the decline. The stability in these trends is reassuring for policymakers, who may keep the Fed on hold until summer, waiting for the fallout of President Trump’s fiscal agenda.
Annual benchmark revisions to the payrolls count and household surveys will also be closely watched. Goldman Sachs projects a record increase of 3.5 million in population and 2.3 million in household employment. The BLS surveys have differed sharply since the post-Covid era, with the establishment survey being more optimistic than the household survey.
If the report meets expectations, it’s unlikely to impact the Fed’s decisions. “The labor market is a lot more important to the Fed than what’s going on with tariffs,” said Eric Winograd of AllianceBernstein. The BLS will also release data on average hourly earnings, which are expected to show a 0.3% increase in January and a 3.7% 12-month increase.
Source: https://www.cnbc.com/2025/02/06/the-big-january-jobs-report-comes-out-friday-heres-what-to-expect.html