Consumer Alert: Jaw-dropping January Jobs Report. Here’s what it means for your wallet.
ROCHESTER, N.Y. Holy moly! No one saw this coming. The jobs report was released today and it was a whopper.
The country added 517,000 jobs in January. That’s far more than economists were expecting. And the word that sums up their reaction is gobsmacked! Economists surveyed by Bloomberg were expecting the U.S. to add 189,000 jobs.
Instead, we added more than twice that. And unemployment is at 3.4 percent, the lowest in 53 years. The last time it was that low Richard Nixon was president and we watched men walk on the moon for the first time.
If you’re looking for a job, it helps to know where the jobs are. Nationally the areas that saw the most job growth were leisure and hospitality, business services, government, healthcare, retail and construction. Now the state hasn’t released New York’s January jobs report yet, but I checked the state’s December report.
And here in New York, our job growth is in the same areas except for government where we lost jobs that month. President Biden was thrilled about the jobs report. Before heading off to Philadelphia, he took credit for low unemployment and no blame for inflation.
“Today I’m happy to report that the state of the union and the state of our economy is strong. We learned this morning that the economy’s created 517,000 jobs just last month, half a million jobs just in the month of January,” said Biden. “Do I take any blame for inflation, no? Because it was already there when I got here man. Remember what the economy was like when I got here? Jobs were hemorrhaging. Inflation was rising. We weren’t manufacturing a damn thing here. We were in real economic difficulty.”
The truth is we may still be facing real economic difficulty. The Federal Reserve can’t be thrilled about today’s jobs number. Remember, the Fed has raised interest rates eight times in a year to try to cool this red-hot economy and tame inflation.
But our last consumer price index showed that inflation is slowing. And that’s why this jobs report is such a head-scratcher. Julia Pollak, chief economist for ZipRecruiter told CNBC on Friday, “Falling inflation paired with falling unemployment is the stuff of economics fiction.”
That’s the sentiment echoed by most economists. What’s happening now is pretty nutty. And on this most economists also agree, this jobs report means a major recession this year is less likely and the Federal Reserve will probably have to raise rates again at its meetings in March and May.
So if you need to finance a big purchase like a car, rates will only get higher this year. Take that into account when evaluating the family budget.