CUNA research: Larger than expected increase in January jobs report

CUNA Senior Economist Dawit Kebede issued the following statement in response to the Labor Department’s January Jobs Report:    

“The U.S. economy added 517,000 jobs in January with gains widespread in several sectors. The unemployment rate also dropped to 3.4% - a record low in several decades.  

“This is a much larger increase than consensus projections. As consumer spending and investment activity slows down in the backdrop of tight monetary policy, the expectation is that employers will add fewer jobs creating some slack in the labor market. The trend in the last quarter of 2022 seemed to go in that direction - with an average of 250,000 jobs a month, a slower pace than previous quarters.  

“The increase in wages slowed down, indicating employers are able to find workers despite the imbalance in labor demand and supply. The average hourly earnings increased by 0.3%, to an annualized rate of 3.6%. This is close to a long-run trend in wage growth.  

“The strong employment gain is not good news for the Federal Reserve fighting to bring inflation down to a 2% target. The projections by members of the Federal Open Market Committee show that an increase in the unemployment rate is part of calculus to bring price increases down.”