The Top 10 Takeaways From The Jobs Report

In January, the economy added 353,000 jobs.  However, the details are mixed.

Here are the top 10 takeaways from the jobs report:

1)     The U.S. economy has added 2.3 million jobs over the past 12 months.

2)     The number of unemployed increased by 0.4 million over the past year.

3)     The number of unemployed (over 27 weeks) increased by 200K YoY.

4)     The number of part-time workers increased MoM.

5)     The average weekly hours worked fell in January!

6)     Average weekly earnings increased 3% YoY.

7)     Average hourly earnings increased 4.5% YoY.  Strong!

8)     Employment in goods-producing categories has increased by 0.3M YoY.

9)     Private services employ 2.1 million more workers over 12 months.

10)   The Government sector employment has grown by 0.5 million jobs over the   

        past year.

A few other observations:

Negative Revisions:

Over the past year, the BLS report has been too optimistic and the revisions are quite dramatic. See the chart below.  I am assuming the January reported number will be revised lower, until the trend of negative revisions changes.

Source: Doubleline

The average weekly earnings and average hourly earnings increased by 3% and 4.5% respectively.  These increases are strong (positive for consumer spending) but likely decrease the odds of a March rate cut even more.  The odds of a March cut have fallen from 75% to 24% over the past month. 

ISM's new orders are growing again.  This is positive for manufacturing employment and will help S&P earnings growth in the 2H 2024.

Thanks for reading!