Assestment labor market report January 2025
Despite weaker-than-expected payroll figures, the labor market appears to remain on a solid trajectory, showing a slight pickup toward the end of the year after softer readings in mid-2024.
This report is unlikely to alter the Federal Reserve’s inclination to pause rate moves in upcoming meetings, especially in light of recent improvements and wage gains. Still, the bias remains skewed toward cuts, and based on current data, the likelihood of another hike seems low for the time being.
-
Upward revisions pull up the three-month average to +237K & rising, which signal the acceleration at the end of the year
The services sector is the major contributor, and the good-producing sector still struggling in line with the weaker manufacturing sector.
-
Supply and demand dynamics still in good balance after these week’s reports.
It is still worth pointing out that hiring is still low, which means the market is currently more vulnerable to any layoff shock.
-
Wage growth has been picking up in service industries and slowing down in manufacturing/goods industries. This is the part of the report the FED is unlikely to like.
-
Employment level got positively revised (+2M) due to population adjustments and payrolls negatively revised (-600k). Closing the gap between payrolls and employment that lasted for months.
