U.S. job growth slowed more than expected in January, with nonfarm payrolls rising by 143,000, down from December’s revised 307,000, according to the Labor Department. Economists had forecast 170,000 new jobs. Harsh winter weather and California wildfires likely played a role in the decline. Despite slower hiring, the unemployment rate dipped to 4.0%, giving the Federal Reserve reason to hold off on interest rate cuts until at least June.
Market Reaction:
- Stocks: S&P 500 futures edged up 0.02%.
- Bonds: The 10-year Treasury yield rose to 4.489%; the 2-year yield hit 4.26%.
- Forex: The dollar strengthened 0.2%, while the euro declined.
Expert Insights:
- Jeff Schulze, ClearBridge Investments: “While the headline number missed expectations, strong prior-month revisions and lower unemployment make this a solid report. Rising wages may partly reflect weather distortions.”
- Chris Zaccarelli, Northlight Asset Management: “January data is noisy due to seasonal trends. The payroll miss isn’t as bad considering December’s upward revision.”
- Peter Cardillo, Spartan Capital Securities: “Rising hourly wages stoke inflation fears, likely keeping the Fed in a wait-and-see mode.”
- Lindsay Rosner, Goldman Sachs: “The report reflects one-off factors like weather. The Fed will likely avoid overreacting.”
Despite mixed signals, markets showed minimal movement, suggesting investors see the report as neither overly strong nor weak. The Fed is expected to maintain its cautious stance heading into its next meeting.
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