Tomorrow’s jobs report is “set to be a doozy” in the words of this story.
Omicron. Revisions. Big seasonal factors. Friday’s U.S. jobs report for January is poised to be a doozy.
Nonfarm payrolls forecasts — analysts’ guesses at how many American jobs were lost or gained — range from a 400,000 monthly decline in January to a 250,000 advance, and the confluence of crosscurrents will likely make the report a bit baffling. So much so that White House officials have already warned the report could be confusing or even misleading.
The Associated Press shares the theme, assigning the blame to Omicron and suggesting that it’s a blip.
Still, most economists expect a relatively quick rebound in hiring, possibly as soon as this month. Nationally, reported omicron infections are tumbling. And many businesses are still desperate to hire: The number of job openings in late December reached nearly 11 million, just below a record set in July.
“Investors, policymakers and firm managers should essentially just write off the (January jobs) report as a one-time set of noise that will not alter the underlying strong trend in hiring and the tight labor market,” said Joe Brusuelas, chief economist at RSM, a tax advisory firm.
Meanwhile, the NFIB reports employers are still struggling (we used their word) to fill open positions.
A historic number of small businesses are struggling to increase their workforce, according to NFIB’s monthly jobs report. A net 50% (seasonally adjusted) of small business owners reported raising compensation, up two points from December and a 48-year record high reading. A net 27% plan to raise compensation in the next three months, down five points from December.
“Small business owners are managing the reality that the number of job openings exceeds the number of unemployed workers, producing a tight labor market and adding pressure on wage levels,” said NFIB Chief Economist Bill Dunkelberg. “Reports of owners raising compensation continues at record-high levels to attract applicants to their open positions.”
There is some good news in the U.S. Department of Labor’s report that unemployment claims fell again last week.
In the week ending January 29, the advance figure for seasonally adjusted initial claims was 238,000, a decrease of 23,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 260,000 to 261,000. The 4-week moving average was 255,000, an increase of 7,750 from the previous week’s revised average. The previous week’s average was revised up by 250 from 247,000 to 247,250.
The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending January 22, unchanged from the previous week’s unrevised rate.
The AP report on the jobless numbers includes this,
On Tuesday, the government reported that the number of posted jobs rose 1.4% to 10.9 million on the last day of December, compared with the previous month. That is far higher than pre-pandemic levels, though just below the record number of 11.1 million that was reached in July. The data suggests companies were still desperate to hire workers last month yet had trouble finding enough people to fill their open jobs.
The labor shortage continues to slow the recovery.