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Weekly Economic Monitor – The Job Outlook

By Scott J. Brown, Ph.D., Raymond James

The Job Market Outlook – The U.S. economy lost 2.77 million jobs in the initial estimate for January, which is on par with what we saw a year ago (-2.79 million). Seasonally adjusted, this was recorded as a 49,000 gain (with private-sector payrolls up just 6,000). Still, accounting for the seasonal noise, the recent data indicated that the job market has cooled off significantly following a sharp rebound in the late spring and summer (payrolls averaged a 29,000 monthly gain over the three months ending in January). The slowdown reflects the pandemic surge (and efforts to contain it). The bigger test for the job market occurs from February to June, when payrolls normally ramp higher. The pandemic is likely to restrain job growth in the near term, but we ought to see stronger gains once vaccines become more widely distributed.

This Week – The economic calendar thins out, with the Consumer Price Index being the only major data release. An increase in gasoline prices is expected to drive the CPI higher in January, while restraint on rents should keep core inflation on a moderate trend. Fed Chair Powell will speak to the Economic Club of New York on Wednesday. The topic is the current state of the job market.

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