Job Growth Slows in January, Unemployment Rate Unchanged

The January jobs report is expected to reveal a deceleration in hiring and a stable unemployment rate. The Bureau of Labor Statistics will release its monthly report at 8:30 AM ET on Friday.

Economists estimate non-farm payrolls to have increased by 170,000 in January, while the unemployment rate remained steady at 4.1%, as per Bloomberg's consensus estimates.

In December, the US economy surpassed expectations by adding 256,000 jobs, leading to a decline in the unemployment rate from 4.2% to 4.1%.

EY senior economist Lydia Boussour predicts a "solid" increase of 190,000 nonfarm payrolls, exceeding consensus but slower than December's robust pace.

Despite recent economic uncertainties, the FedWatch Tool indicates that investors assign a 50% probability to the possibility of an interest rate cut by the Federal Reserve at its June meeting.

Wall Street Expectations for Friday's Report:

* Nonfarm payrolls: +170,000 (vs. +256,000 previously)
* Unemployment rate: 4.1% (vs. 4.1% previously)
* Average hourly earnings, month over month: +0.3% (vs. +0.3% previously)
* Average hourly earnings, year over year: +3.8% (vs. +3.9% previously)
* Average weekly hours worked: 34.3 (vs. 34.3 previously)

Recent data suggests a slowdown in the labor market without a sharp decline, with low layoff rates. The Bureau of Labor Statistics reported a decrease in job openings to 7.6 million in December, indicating the largest sequential drop since October 2023.

However, other indicators within the report remained steady, with the hiring rate at 3.4% and the quits rate at 2%, signaling worker confidence.

Private payrolls increased by 183,000 in January, according to ADP data, exceeding December's 176,000 additions.

Economists generally view the recent labor market data, including the January jobs report, as consistent with Fed Chair Jerome Powell's description of a "broadly stable" market.

Jefferies US economist Tom Simons notes that while employment data can impact markets, it is unlikely to change the Fed's stance on monetary policy, given Powell's recent confidence in the labor market.