The jobs report for January continued last month’s inscrutability, probably for some of the same weather-related reasons. With consensus expectations running around 190,000, the economy added only 113,000 net new jobs. But the unemployment rate again dropped, this time slightly, from 6.7% to 6.6%. The workforce participation rate did bump up some, so there will be less talk than last month the unemployment rate disguising a shrinking workforce.
BLS did revise November’s jobs number upward by 34,000, and despite expectations December’s paltry numbers would be revised upward a lot more, there was only a 1,000 job adjustment.
One take on these numbers (along with December’s) is that crazy weather and seasonal issues mean we should ignore them and wait for next month’s. The slight decline in the unemployment rate will be the news most Americans absorb. But since the unemployment rate is the trigger for Fed action to raise interest rates, and it’s now near the Fed target of 6.5%, inflation hysteria could soon come back among those for whom inflation is all seven of the deadly sins. I’m really glad Janet Yellen is in place at the Fed.