January Jobs still strong despite a decline

The January Jobs report from the US Labor Department on Friday showed a slight dip in the non farm jobs, and this from an expected 175,000, a figure that would have aligned it with the private payroll firm ADP in its Thursday reporting of jobs in the private sector. But, as it was, the 143,000 did not reveal upon examination a weakening of American employment, in fact it showed much of the same detail as the prior months: strong hiring in government, leisure retail trade and hospitality, and the general unemployment rate, what we refer to as the marquee rate, which dipped down to 4.0.

What was remarkable about the report was that, other than the lower figure, it was not remarkable, in fact it has shown a steady stream of numbers that has given a consistency that is remarkable under varied market forces, political winds, and a weakening consumer confidence.

The same data points of prior reports are here; both for the unemployed and its continued litany of sameness: no change along racial or gender; the long term unemployed; those working part time hours that wanted full time work, people that were not in the workforce that wanted a job, and perhaps most significantly for policy wonks, as well as economists, the labor force participation rate which has remained the same at 62.6 percent.

Taking a look at the winners we see health care that added 44,000 jobs, but also showed gains in hospital work of 14,000; retail which enjoyed a good holiday earning margin , ratcheted up to to 34,000 in January; and social assistance added 22,000 jobs, that was “led by individual and family services of 20,000; and government employment held at a steady rate of 32,000.

This is all solid stuff, and for those looking for clouds in the silver lining they are not finding it. For example, it was expected that the fires in Los Angeles County, and the frigid temperatures that much of the nation faced, would be a factor, but DOL ruled this out when it said that these events had “no discernible effect” on employment. Of course, it was also noted in the household survey that record numbers of these workers were absent from their jobs.

While layoffs were up by 28 percent from 38.792 from December of 2024, according to Challenger, Gray and Christmas, they also reported that there was a decrease below 40 percent from the 82.307 from January of 2024.

All in all, most economists agree that, "There is still much to like about the U.S. labor market's resilience and sustainability," said Scott Anderson, chief U.S. economist at BMO Capital Markets, reported Reuters; and he noted, "This report cements the view that the Fed could be on hold for a considerable time before cutting rates again."

In fact, most market observers are saying just that, and there are some that are saying that any rate cuts might occur in mid-year, but at this point that is only speculation.

It bears to remember that the Fed cuts rate in response to the state of the economy: when it overheats and there is threat of inflation, rates are increased, when it cools down and needs stimulation, rates are cut to increase spending, and at this point in time, we are not seeing either scenario to dictate cuts or increases. 

“The Fed left its benchmark overnight interest rate unchanged in the 4.25%-4.50% range last month, having reduced it by 100 basis points since September, when it embarked on its policy easing cycle. The policy rate was hiked by 5.25 percentage points in 2022 and 2023 to tame inflation,” added the news agency.

Taking a broad view, this is a healthy labor market and especially noting that average hourly earnings hit a high of 0.5 percent, “the most since August, after gaining 0.3 percent in December; and, more than enough to meet inflation.

Consumer confidence is a factor that many are examining, and especially the Fed, and in a press statement, The Conference Board, said, in part, the following:

“The Conference Board Consumer Confidence Index® declined by 5.4 points in January to 104.1 (1985=100). December’s reading was revised up by 4.8 points to 109.5 but was still down 3.3 points from the previous month. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell sharply in January, dropping 9.7 points to 134.3. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell 2.6 points to 83.9, but remained above the threshold of 80 that usually signals a recession ahead. The cutoff date for preliminary results was January 20, 2025.”

As has been noted before the sentiments of the American consumer can loom large, both in perception, one tenth of the law as the old adage states, but if we have the good news, then consumers may see a different reality than that of economists, and even the Labor Dept.

Doing a deep dive into methodology, and statistics, there is a New methodology by DOL for the household survey has resulted in an incomparable reporting of the unemployment rate from December, now at 4.0%, its lowest since May.

One word of caution coming from The New York Times, “James Knightley, chief international economist at ING, has an interesting data point on the “quality” of the jobs being added. Initially, he noted that 78 percent of all U.S. jobs created since 2022 came from only a handful of sectors: government, leisure and hospitality and private education and healthcare. Following January’s revisions, that share has jumped to 88 percent. He adds, “We believe those three sectors tend to be lower paid, less secure and more part-time.”

Politically speaking, the Trump White House has eviscerated the 2024 job gains of the Biden administration, but, in truth, despite the larger revisions of the end of the 4th quarter, there was more substance than they might want to acknowledge, “And while job growth was weaker than earlier estimates showed, the revisions did little to change the overall picture of a strong labor market. Employers added 2.6 million jobs in 2023 and two million in 2024. Over President Joseph R. Biden Jr. 's four years in office, the economy added more than 16 million jobs, although much of that came during his first two years as businesses reopened from the pandemic,” said the Times in their coverage.

“The White House press secretary, Karoline Leavitt, leaned into the narrative that job growth was weaker in 2024 than previously estimated. “Today’s jobs report reveals the Biden economy was far worse than anyone thought, and underscores the necessity of President Trump’s pro-growth policies,” she said in an earlier statement.

Continuing along the political path, there is a great deal of anxiety and worry by many economists and observers, not to mention the average citizenry on the 25 percent tariffs by President Trump that began on Monday, on steel and aluminum from all of US trading partners, beginning March 12; but, as the Council on Foreign Relations reported, it is not clear if these will be in addition to "existing duties, though a White House official said this would be the case for Canada."

With the US importing ha half of aluminum for Canada, and two thirds from Canada, the effects on the American consumer would be great, causing a ripple affect on the cost of military aircraft, but many industries, as they reported use imported steel on specific productions of steel pipes and steel, which would boost production and increase jobs in the country. But, the offset would result "by losses in manufacturing and other industries that rely on steel."

As can be guessed, the cost of job loss and increased prices from consumers would be great, as it was done in 2018 in response to Trump tariffs.

The biggest job losses are from the federal government with the gutting efforts by the Department of Government Efficiency, headed by Elon Musk, but also many average working Americans who work in related industries that would affect their kitchen table issues, quite literally fruit and vegetables from Mexico, and lumber and auto parts from Canada; which has created tensions on the borders between the two countries, especially seen in Windsor, Ontario and Detroit, where hundreds of auto parts as well as automobiles cross between the two countries.

Anticipating the hardships that Americans might endure, Canadian Prime Minister Justin Trudeau, in a video warned Americans of the pending economic consequences.

Economists have warned that the average American household expense would rise to $1200 per year if they are enacted.

Recent news has shown the bloodletting from these losses, and what is known, now, but with more to come, are from a workforce of nearly 200,000 workers across the country. Here is just a partial list of those that now face unemployment: USAID, 10,000; Dept. of the Interior, 2,200; Small Business, 20% of its workforce; Dept. of Energy, 1200 to 2000; Centers for Disease Control, 10 %; Dept. of Homeland Services, 400,00; and in Veteran Affairs, 1,000 of the 43,000 probationary employees were fired.

And there is more to come in the coming days and weeks

Finally, there is Immigration, or the presence of illegal, or undocumented, immigrants to the US, like them, or not, they have contributed to greater employment in not only agriculture but construction, and manufacturing; and, while there is plenty of blame to be assigned, the fact remains that many local governments participated in the hiring of these workers, often flouting local and state laws that skirted existing federal laws against their hiring. And, their loss, through deportation, adds to the instability of a mostly strong American economy in the coming months.

Updated February 16, 2025 at 10:20 p.m. CST

Trump is back!

It’s official, Donald J. Trump, as of 12:01 p.m. this past Monday, is now the 47th president of the United States, in a country that is still divided, but with his key goal of migrant removal seemingly approved. And, Washington was replete with American flags flapping in the frigid weather, and Republicans lost no time in cris crossing the capital in a show of solidarity, culminating in celebratory parties from Georgetown to Kalorama, two of Washington’s toniest neighborhoods.

His comeback is considered remarkable, but it is no surprise to his base who championed him far and wide. What can be questioned is if he has a mandate, and while true enough that he won the popular vote this time, the win was by approximately 1,000 votes; the electoral college notwithstanding 51.2 percent versus Harris at 47.8.

What is now apparent is that Trump will do his utmost to promote his agenda, and the highlights are: immigration first, and foremost, closing the border, deporting illegal immigrants, and especially those who have committed crimes; dismantling DEI requirements in the federal government and the military; and, putting 25 percent tariffs on Mexico and Canada. 

In a demonstration of his will, Trump immediately signed a slew of executive orders, and one stating that there are only two genders, male and female, an opening salvo in the battle for transgendered rights. 

Perhaps to no one’s surprise he also pulled the US out of the Paris Climate Accord, and the World Health Organization, whom he and other Republicans have criticized for their efforts in public health facing the COVID pandemic.

Next up is the slimming down of the federal bureaucracy, one that he called bloated, and who critics fear he will fill with loyalists. And, while that has not been seen yet, a look at the fact that Trump has remodeled the Republican Party in own image, it's not an empty promise, and on Tuesday, the day after he was inaugurated, he had all Diversity Equity and Inclusion employees in the federal government place on paid leave effective Wednesday,

Perhaps, the most pressing changes are not the promised deportation, as controversial as they are, but the pardon or commutations of the 1500 Jan 6 protestors who stormed the US Capitol building, breaking windows and threatening to hang his vice president, Mike Pence, and to drag Speaker of the House Nancy Pelosi from her office

Capitol Hill officers who were guarding both the building, and them, were bombarded with batons, bats, and pepper spray, resulting in the death of Officer Brian Misnick, whose heart could not withstand the sheer physical and mental effort he put forth to defend the building, and its occupants.

It is notable that Trump’s  then running mate, and now Vice President, JD Vance said he would not do so, have now created a dilemma  for the new administration, albeit an unintended consequence of a campaign promise, if not now, then later.

While some Republicans have said that eventually these pardons will fade into the background, it is at odds with the wholesale support of police officers across the nation, by the party, and their supporters.

The promise of mass deportations, roughly estimated to be 12 million undocumented people, has created fear in many of America’s largest, and Democratic cities; but, especially in Chicago, where the designated Border Czar, Tom Homan said will begin in Chicago, has raised the threat level among many undocumented people, despite their age, and socio economic status.

While the popular conception is that undocumented workers are all from Mexico, that is not true, and there are many Indians from South East Asia, China and Vietnam, working across a variety of places in the city.

While below zero temperatures in many parts of the country may have hampered Homan’s efforts, the fear factor remains, especially when the Department of Homeland Security’s Acting Secretary Benjamine Huffman recently changed the rule that schools and churches, once off limits for Immigration and Customs Enforcement arrests, can now be made.

Those efforts culminated in a perceived threat by ICE officials in an elementary school on Chicago’s South Side, Hamline, that later proved to be the Secret Service searching for a public official that they were to guard, but who had disappeared, only to be told later that he was at the school. While that initial report proved to be false, it has put the city on cautious alert, and both Mayor Brandon Johnson, and Governor JB Pritzker have vowed to not support ICE efforts at deportations, with Johnson saying, “We’re going to fight and stand up for working people. That’s what Chicago is known for.”

“Both Chicago and Illinois laws prevent local law enforcement from asking about a person’s immigration status, detaining them because they lack statute and notably, largely bar officers from cooperating with federal agents. There is an exception if ICE agents are looking for individuals with federal criminal lawsuits,” reported local PBS affiliate WBEZ.

Several alder people have sponsored “Know Your Rights” seminars, and some local churches have also done the same, perhaps in response to the plea for mercy from the Episcopal bishop of Washington, the Rev. Mariann Budde in a National Prayer Service, where she told the president, in her sermon, that many people were scared of his policies, and noting that many undocumented people were not criminals, but hard working people.

There are reports of a flight to Guatemala deporting immigrants from the US, approximately 265, on three flights, and one charter, that country said.

Reports of planes to Mexico carrying deportations have not been verified, as of this date; but, Mexico has established tent cities along the border to welcome any Meixans that are deported, and give them health care, and take care of other needs.

Trump’s agenda has been well established along the campaign trail 

All of these moves has angered Democrats, left leaning politicians and their supporters; but, in reality this should also not come as a surprise to them, but as the famous entomologist William Safirre once wrote in his New York Times Magazine column, “the proof of the pudding is in the eating.”

One of the most controversial of Trump’s executive orders is the repeal of the 14th Amendment of the right, not a banishment, of the Constitution, which states that anyone born in the United States is a citizen. Trump says that this can no longer be unless one parent is a citizen. 

Supporters have said on social media that this is a redefinition, not a banishment, but wordsmithing may not hold much weight with constitutional law.

This denial would affect hundreds of millions of people, and has already frightened many families; but, one that might prove to go to the Supreme Court, and we have been told, on background, is the very intention of the new president.

However, reaching back to the civics classes of yore: to change the Constitution of the United States, Congress must call a convention for the proposal of an amendment, after an application of the state legislatures, by two thirds, 34 of the current 50 states, and become valid “only when ratified by the legislatures of, or conventions in, three fourths of the states, (i.e. 38 of 50 states), according to the National Conference of State Legislatures.

On Thursday US District Judge John C. Coughenour,according to the Associated Press, “temporarily blocked” the order, “in the case brought by the states of Washington, Arizona, Illinois and Oregon, which argue the 14th Amendment and Supreme Court Case law have cemented birthright citizenship.”

It’s important to note that executive actions are not legislation, and can be undone by succeeding presidents, but despite either the intent, or the results, this is Trump’s moment.

One cause of concern: Trump is 78, not too much younger than his predecessor, Joe Biden, and with a 40 year old vice president to succeed him, the agenda that is Trump’s could be with the country for a long time.

 

Then again, it might take years to have the Trump agenda codified, for example the dismantling of the DEI office and employees; and, as Noreen Farrell the executive director of Equal Rights, a gender rights group, told the AP, “the reality of implementing such massive structural changes is far more complex.”

The DEI programs had a far ranging effort to help Black majority neighborhoods, “credits for minority farmers,” as well as increasing hiring opportunities for racial minorities, and women.

To note, the initial 2022 rapport released by the federal DEI for the federal workforce, said that it was, “about 60 percent white and 55 percent male overall, and more than 75 percent white and more than 60 percent male at the senior executive level.”

These executive orders are just the tip of the iceberg, administration officials state, and as the nation responds with cheers, and jeers, it’s apparent that Trump is back, and the nation, and the world, is on edge in anticipation of the future.

Heads up for a boost in the December 2024 Jobs Report

The news is in, as of Friday, 256,000 non farm jobs were created for the month of December, an unexpected surprise for the United States economy, and a boon to to those in government, and for job seekers, Accompanying the good news is the unemployment rate of 4.1 percent, giving solace to many, and support towards the soft landing that Treasury Secretary Janet Yellen and Fed Chair Jerome Powell so long predicted, and hoped for.

Consistent with that news is the unemployment rate of 4.1 percent, and accompanied by the usual heavy hitters: leisure and hospitality, government, education, and construction giving weight to that old canard, a resilient American economy, which while overworked, seems to be the label that can best be applied to the current state of the world’s largest economy.

Factoring in the good news is that it is highly unlikely that the Federal Reserve Bank will cut interest rates further than it already has, and as the Fed noted in mid December, “recent indications suggest that economic activity has continued to expand at a solid pace,” and most importantly, ”The Committee seeks to achieve maxim employment and inflation at the rate of 2 percent over the longer run.”

At that time they “decided to lower the target range for the federal funds rate by ⅓ percentage point to 4 to 1/4 point to 4 to ½ percent.”

Giving an overall look most economists feel that there is nothing wrong with this report, and President Joe Biden, in a statement from the White House, said, “Although I inherited the worst economic conditions in decades with unemployment over 6 percent when I took office we’ve had the lowest average unemployment rate of any administration in 50 years with unemployment at 4.1 percent as I have.”

As The New York Times notes, this report shows, “renewed vigor after months of caution among both workers and businesses.” 

Perhaps most significantly, and probably speaking for many economists, and observers, was Thomas Simons, chief U.S. economist at the banking firm Jefferies, who added to the Times report, "It is hard to say anything negative about the details of this report.”

Amidst the robust report there is the slight but statistically significant lower rate for women in the workforce to 3.8 percent, from 3.9 %, and in general for women’s employment increased to 57.4 %, and for Black women there was a decrease of unemployment to 5.4 %.

Consistent with that, the closely watched household survey was very strong and grew to nearly a quarter of a million people, with fewer people out of work over the last six months.

Close on the heels of that is the lowered jobless claims reported on Thursday, but there was both acknowledgement and a cautionary note reported by Yahoo Finance: [while] “ Simons said that ”there's a disconnect between labor demand and weekly jobless claims, plus, "A mentor of mine in the past always cautioned me, 'Don't try to predict employment with an unemployment statistic.'”

"Additionally, he points out that the figures don't fully capture businesses' reluctance to lay off workers due to concerns about future talent acquisition. However, he suggests this dynamic may shift and recommends monitoring the labor metrics of small businesses and startups,” for that fuller picture.

Encouraging was the Labor Force Participation Rate which for those aged 25 to 54 years old decreased to 83.4, capturing data for those working part time, and seeking full time work, or those not working, a half point lower than the 83.9 % than last year. These figures are the lowest since March, and looking at a four week average, and with data capturing points both high and low, their descent was by 3,500 to 232,250.

The heavy hitters ar as we have seen in previous months: Education and health care at 80,000; retail (may be a positive blip due to seasonal hiring) of 43,4000; leisure and hospitality at 43,000; government at 38,000, and business services, that catch all at 28,000; with weak link being manufacturing which showed a loss of 13,000, but may be attributed to weather conditions, as a few reports back there was an increase.

For Black women there was a significant decrease in unemployment and nbc4washington.com reported that, “For Black women, the unemployment rate dropped to 5.4% in December. That is down from 5.9% in November, when the jobless rate rose nearly a percentage point for the cohort. The labor force participation rate, which tracks the population employed or seeking work, inched up to 62.4%..”

“Among Black workers overall, the unemployment rate also declined in December, slipping to 6.1%. That compares to a rate of 6.4% in November and 5.7% in October.”

"There were some concerns about the Black unemployment rate going up," said Elise Gould, senior economist at the Economic Policy Institute, referring to November's uptick. "It's still significantly higher than for other groups — and that's still a concern — but nothing in this report jumps out as particularly problematic."

Associated Press reported that those receiving unemployment benefits “fell to their lowest level in nearly a year last week, pointing to a still healthy labor market with historically low layoffs.”

And, for that week, despite the cautionary notes, there was a “four week average of claims, which evens out the week to week ups and downs, fell by 10,250 to 213,000.”

Pulling the camera back a bit, we can see that through November U.S. employers added 180,000 jobs a month for 2024, but down from the “go go” year of 2023 when there were 231,000, but no one can say that this past year was bad by any means.

While a proxy for layoffs, the joblessness claims, AP noted, but also significantly reported, “those have remained below pre pandemic levels.”

The Labor Department report also showed that wages increased by 0.3 % over the month, giving a leg up on inflation, still not at the desired 2% mandate for the Federal Reserve.

Despite that mandate, and according to Bloomberg News, “Americans expect prices will climb at an annual rate of 3.3% over the next five to 10 years, up from the 3% expected last month, according to the University of Michigan’s preliminary January survey released Friday. They also see costs rising 3.3% over the next year, up 0.5 percentage point from December.”

“Nearly one-third of consumers spontaneously mentioned tariffs, up from 24% in December and less than 2% prior to the election,” Joanne Hsu, director of the survey, said in a statement. “These consumers generally report that tariff hikes will pass through to consumers in the form of higher prices.”

“Inflation expectations climbed across many demographic groups, particularly lower-income Americans. More concerning, 22% of respondents reported that buying big-ticket goods now would enable them to avoid future price hikes. That matches the prior month as the highest since 1990, the report showed.”

Before we dive into the political angles and there are many, a quick note about retail figures, they are showing also as a predictor of permanent employment, since they often are the pathway for permanent employment; but, this might be conjecture on some observers who state that women with less than 2 years of post secondary education may be headed for a loss, while that may be getting ahead of ourselves since we have seen an increase in employment for women, and the question may hinge on future efforts by the incoming administration of Donald Trump.

As we wrote last month, “The elephant in the room are the proposed tariffs of 25 percent, on Canada, Mexico, and even higher for China, and has been widely reported to have a detrimental effect on the US economy, and consumer buying which is the bedrock of the American economy. 

Suggestions that these are negotiating tools for Trump are, at this point speculation, but definitely a cause for concern.  If the so-called DOGE efforts at reducing government waste, a laudable goal, but if it includes layoffs, those could have a detrimental effect on national employment.”

Another facet is that Trump, no fan of Federal Reserve Chair Jerome Powell will try to fire him, not technically possible as the Fed operates independently of the presidency, but the recent resignation of Vice President of Supervision Michael Barr to prevent what he felt would be the new administration to keep the Fed from being politicized, or to use the vernacular, he saw a target on his back.

“I strongly value the independence of the Fed,” Barr told POLITICO on Monday shortly after he announced his plans to resign as vice chair of supervision. He said he chose to quit as vice chair — while maintaining his seat as a Fed governor — because he “was worried that the risk of a dispute over the position would end up being a political distraction for the Federal Reserve and for me, and that that would end up detracting from our ability to serve our mission.”

While Trump has never publicly commented on the Barr resignation, or any intentions at weakening the independence of the Fed, there were discussions during the campaign, and as Politico noted:

“Throughout the 2024 campaign, Trump advisers and allies floated several ideas as to how he might blunt the Fed’s independence in his second term. Stephen Miran, Trump’s pick to lead the Council of Economic Advisers, and Dan Katz, who’s slated to be chief of staff at Treasury, published a paper calling for changes that would allow the president to dismiss Fed governors at will. Trump’s Treasury nominee Scott Bessent proposed appointing a “shadow Fed chair” to provide forward guidance on rates while Powell serves out his term as chair. (That idea has already been abandoned.).”

While there is some disagreement among academics on how weakening the independence of the Fed could work, it's clear, that for some, it’s all over but for the fighting, according to an old expression from the American South.