Will the Federal Reserve take action on rates after latest data?
Employers across the US added 143,000 jobs last month, fewer than economists had expected and below revised totals from the end of 2024, although unemployment also fell in January.
Government data released Friday showed January labor market growth was milder than economists had anticipated, with analysts predicting an uptick of 170,000 jobs. But the jobless rate slid to 4%, signaling a steady if unspectacular economy inherited by new president Donald Trump.
Meanwhile, new estimates showed job growth in the past three months has averaged around 237,000 – a pace Mortgage Bankers Association (MBA) senior vice president and chief economist Mike Fratantoni said would likely prove difficult to sustain in 2025.
Still, he said several factors also complicated that picture including “substantial” revisions to prior payroll data and a household survey adjustment to reflect the impact of international immigration over the past few years.
That growth has added 2.9 million people to the overall population count as of last month, he said, a key element in driving down unemployment. Climate disasters including the Los Angeles wildfires, meanwhile, remain another source of uncertainty.
January’s jobs figures, which also saw wage growth climb higher (to 4.1%), are unlikely to convince the Federal Reserve to change course on its plans for the year ahead, according to Fratantoni.
He said the central bank is still unlikely to view an interest rate cut as an imminent priority. “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,” he wrote.
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