The Labor Market Is Suffering, but Today’s Jobs Data Looks Just Peachy
The labor market has been tremendously damaged over the past few weeks, with President Donald Trump’s administration moving to freeze federal aid and laying off thousands of federal workers. It is the basis for a series of executive orders, threats from trade wars, mass deportations and stock market fluctuations.
But on Friday, Bureau of Labor Statistics A report on “positive” employment that investors and market observers consider to be in January was released. That disconnect made me scratch my head.
One explanation is that economic data is looking back: Friday’s report reflects the labor market in January, before the relative chaos begins. Even so, I hope at least it will be correct Destructive LA Wildfireseen Thousands of Californians apply for unemployment benefits.
On the contrary, the most Recent labor data The unemployment rate is low and stable at 4%. Additionally, job growth is clearly still moving at a healthy rate.
Perhaps the official labor data is not a reliable narrator of what is actually happening, nor is it about to happen.
Lisa Country QuirozThe CEO of JVS Bay Area, a workforce development nonprofit, said there is no doubt that the new government’s actions will cause unrest for workers and employers and will ripple throughout the industry in 2025.
Potentially volatile job markets
Job market indicators paint a broad picture and reflect past trends, but they do not accurately reflect the economic realities of different fields, populations or industries.
As someone who writes about relationships Manual datathis Housing Market and FedI was not surprised to see the economist actively spinning Friday’s labor report. News reports say the economy is “resilient” and “strong” and the job market can’t be better.”
But, ask your average person to find stable and paid good jobs and you may get a very different answer. In 2024, Pathrise job market data shows that job seekers are on average Eight months and 294 applications to find a job.
This is not an exaggeration Economics feel like free fall. The State Council immediately ordered 90-day foreign aid pauseWith the support of Elon Musk, many government contractors and global agencies are working hard to operate and even pay. At the same time, some 65,000 Federal workers have accepted the offer to resign in exchange for salary until September 30. The White House says it hopes up to 200,000 workers will participate Buyedrecently temporarily suspended by a federal judge.
Furthermore, Trump is taking active action to strengthen the deportation of undocumented immigrants, who almost constitute 1 out of 20 workersmore representative in construction, agriculture and hospitality. Forced evacuation of workers with billions of dollars in state and federal taxes could lead to low-paying job openings, higher labor costs, supply chain disruptions and increased inflation.
“The president has shifted policy directions several times,” said Gene Ludwig, the currency’s former auditor-gene, said. Ludwig Institute for Sharing Economy Prosperity.
“It’s too early to measure the net effect of his policies on employment,” Ludwig told me in an email.
Reduce interest rates and reduce them until later
Economic data, such as Friday’s work report, also influenced major monetary decisions, such as Adjust interest rates. The Fed needs to strike a balance between inflation and unemployment and check official statistics to determine its next move.
First, central banks hope to see inflation slowdowns before lowering interest rates again. But consider The threat of tariffsexpected to raise prices.
Second, the Fed is looking for signs of weakness in the labor market. While the Fed does not want unemployment to reach recession levels, a “healthy” labor market tells central banks that the economy can afford high lending rates.
Odds are Already very low To get the Fed to lower interest rates at its next meeting in March. But now, it is clearer that central banks will delay tax cuts until May or June as early as possible. It can take months to understand clearly how government policies will affect the job market, consumer prices and borrowing costs.
“Any indicator that an economic slowdown will increase the chances of lowering, especially the chances of rising unemployment.” Greg Heymchief economist at Brown Harris Stevens.
At the same time, we only need to meet the different definitions that constitute a positive work report.
“A strong labor market relies on expanding job seekers’ opportunities, not limiting them,” Countryman-Quiroz said.
