On August 22, 2024, employment signs were posted at the door of Taco Bell in Alexandria, Virginia.
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The US labor market probably started in 2025 in a solid way.
When the Bureau of Labor Statistics announced its non-farm salaries in January, it is projected to show growth of 169,000, down from 256,000 in December, which is roughly in line with the average over the past three months. The unemployment rate is projected to remain at just 4.1%, according to the Dow Jones consensus. This will take place on Friday at 8:30am ET.
The slower job creation could mean slower job creation, but a broader view suggests that employment pictures are solid and could become a problem for the Federal Reserve at any time in the near future. means low.
“At least for now, there is an inflation rate due to the level of tolerance and the companies investing very comfortably, so about 150,000 jobs per month, which is the top of what is needed to keep the labour market stable. There’s no reason not to continue growing,” said Joseph Bruseras, chief economist at RSM. “In other words, we are in full employment. This is a good issue.”
By the time the Fed concluded its final three meetings of 2024, it had cut its major borrowing rates in full. This is because policymakers have sought to support the labor market, which has shown signs of weakening.
However, recent indicators show that layoffs have not increased while employment is levelled, and workers have not left, while job openings have declined.
Such relative stability is a welcome sign that the Fed may be on hold until summer, but officials say President Donald Trump’s finances include aggressive tariffs on the US’s biggest trading partners. I’m waiting to see the fallout on the agenda.
“The economy will still be on, people will make investment decisions. They will wake up every morning and go to work,” Bruseras said.
Annual revisions to focus
While regular pay numbers are expected to show more or less current conditions, the market will watch the annual benchmark revision for both facility and home surveys compiled by BLS.
When the first revision was announced in August 2024, they showed surprisingly fewer jobs at the establishment count from April 2023 to March 2024 than previously reported.
The revision is also projected to mark a record increase of 3.5 million people in population and 2.3 million households, according to Goldman Sachs. The company looks upwards for more modest adjustments in workforce participation and unemployment.
The two BLS surveys differed significantly in the post-Covid years. The establishment survey is used to calculate non-farm pay numbers, and BLS derives unemployment rates from the number of households. The latter shows an unoptimistic view of the terms of employment that can be revised in the revised edition.
In any case, if the report comes close to expectations, it is rare to move the needle for the Fed, even if there are still tariff questions.
“The labor market is far more important to the Fed than what’s happening with tariffs,” said Eric Winograd, director of Advanced Market Economy Research at Alliancebernstein. “Salary numbers are unstable. Anything can happen in a given month. But nothing makes you think that this month’s print looks meaningfully different from the past few.
In addition to the pay numbers and revisions in the headline, BLS also releases data on average hourly wage revenue.
The January estimate is that wages increased by 0.3%, indicating a 12-month increase of 3.7%. If the annual numbers are correct, this will be the lowest level since July 2024.
