Saturday, March 2, 2024
Homemarket insiderFed officials could ignore ugly jobs report—for now

Fed officials could ignore ugly jobs report—for now

The shocking drop in December job creation to the worst level in three years raises questions about Fed policy, but it's unlikely the Fed will change course unless other data show the economy faltering.

There were a paltry 74,000 nonfarm payrolls added in December and the unemployment rate fell to 6.7 percent, largely due to a decline in individuals looking for work. Economists had expected about 200,000 and an unemployment rate of 7 percent—consistent with the last several months.

"I describe this as a weather-related clunker," said John Canally, investment strategist and economist at LPL Financial. "Only 1,000 drop in transportation and warehousing. That was up 35,000 the month before and then a big drop in government jobs so I think the Fed will see through this as a weather issue but of course the weather in January was pretty cold as well so it might be a couple of months before we get a cleaner reading on the report but I think the weather is the key."

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