In the past few weeks there have been massive disorders on the labor market when President Donald Trump’s administration freezes federal aid and released tens of thousands of federal workers. This is in addition to a variety of executive regulations, business of trade wars, the start of mass shifts and the volatility of the stock market markets.
But on Friday the Bureau of Labor Statistics Published what investors and market observers regarded as a “positive” job report for January. This separation lets me scratch my head.
One explanation is that the economic data looks backwards: the report on Friday reflects the stand of the labor market in January before the relative chaos began. Nevertheless, I expected that there would be at least some effects of the Destructive La forest firesWhat saw Hundreds of thousands The Californian apply for unemployment benefits.
Instead the most Newer work data shows unemployment low and steadily and inserts with 4%. In addition, employment growth apparently still moves at a healthy pace.
Perhaps official work data is not a reliable narrator of what really happens and what will not come.
Lisa Countryman-QuirozThe CEO of JVS Bay Area, a non -profit organization of the workforce, said that there is no question that the measures of the new administration will cause instability for both employees and employers, the consequences in 2025 in industries Industry will curl.
A potentially volatile job market
Labor market indicators draw a broad picture and reflect previous trends, but do not reflect the economic realities of different areas, population groups or industries exactly.
As someone who writes about the relationship between Work dataThe Housing market and the Federal reserveI was not surprised that economists turn the work report positively on Friday. News reports decided that the economy is “resilient” and “strong” and that the labor market could “not be better”.
However, ask your average person about a stable and well -paid job, and you will probably receive a completely different answer. In 2024, Pohrise -labor market data showed that job seekers were required on average by the job seekers Eight months and 294 applications to get a job.
There is no exaggeration to say The economy feels like it is free. The order of the Foreign Ministry for an immediate 90-day break for foreign helpThe one who was classified by Elon Musk has many government companies and global agencies that are struggling to operate or even pay for their workers. Meanwhile some 65,000 Federal employees have accepted an offer to resign in the exchange for payment by September 30th. The White House hopes that there are up to 200,000 employees in participating in participating in the Buyoutwhich was recently suspended by a federal judge.
In addition, Trump took aggressive measures to improve immigrants without papers 1 out of 20 workersWith even greater representation under construction, agriculture and hospitality. The forced removal of masses of employees who bring in billions of dollars of state and federal taxes could lead to emptiness with low wages, higher labor costs, disorders of the supply chain and increased inflation.
“The President has postponed the political instructions several times,” said Gene Ludwig, former Currency Currency and founder of the Ludwig Institute for common economic prosperity.
“It is too early to measure the net effect of his guidelines on employment,” said Ludwig in an e -mail.
Interest cuts will come later
As well as the job report on Friday, economic data also influence important money decisions such as Set interest rates. The Federal Reserve must be a balance between inflation and unemployment and examines official statistics to determine the next step.
First, the central bank wants to slow inflation before the interest rates reduces again. However, that doesn’t seem as fast as that, given the Tedule from tariffsof which you are expected to increase prices.
Second, the FED is looking for a weakness on the job market. Although the FED does not want the unemployment level to immerse yourself in the level of recession, a “healthy” labor market of the central bank announced that the economy can afford high loan rates.
Were chances already low So that the Fed can lower interest rates at its next meeting in March. But now it is even clearer that the central bank delays interest reductions by May or June at the earliest. It could take months for a clear picture of how the administration guidelines will have an impact on the labor market, consumer prices and credit costs.
“Every indicator that shows a slowdown economy would increase the likelihood of a minor reduction, in particular increasing unemployment” Greg HeymChief economist at Brown Harris Stevens.
In the meantime, we only have to be satisfied with different definitions, which is a positive job report.
“A strong job market is based on the expansion of the possibilities for job seekers and cannot be restricted,” said Countryman-Quiroz.
