January Jobs Report Commentary from MBA's Mike Fratantoni

The following is MBA SVP and Chief Economist Mike Fratantoni's reaction to this morning's U.S. Bureau of Labor Statistics report on employment conditions in January.

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"The January jobs report showed a 143,000 increase in payroll employment, a decline in the unemployment rate to 4%, and an increase in wage growth to 4.1%. At first glance, on net, these data indicate a job market that remains reasonably strong. Job growth over the past three months has averaged a gain of 237,000, likely above what can be sustained this year.

"However, there are several factors working to cloud this picture. First, there were substantial revisions to prior payroll data, with job growth from the most recent months revised higher, but the annual benchmark process showing slower job growth for 2024. Second, the household survey was adjusted in January to recognize the impact of substantial international immigration in recent years, adding 2.9 million people to the population count as of January, which is one factor pushing the unemployment rate down. Finally, the wildfires in Los Angeles and severe winter weather events across the country, while not clearly impacting the results according to BLS, are another source of uncertainty.

"With all the caveats, these job market data are likely to keep the Fed on hold with respect to any further rate cuts. With inflation still above target, and no appreciable signs of weakening in the job market, MBA's forecast is that the Fed will make at most one more cut this cycle."