Over the last few weeks, there has been a huge disruption to the labor market with President Donald Trump's administration to move to federal aid and release tens of thousands of federal workers. It is above a number of executive orders, threats of trade wars, the beginning of mass deportations and instability on the stock market.
But on Friday, Labor Statistics Bureau It has announced what investors and market accusations considered a “positive” job report for January. That shutdown made me scratch my head.
One explanation is that economic data is back: Friday's report reflects the state of the labor market in January, before relative chaos begins. Even so, I expected that at least there would be some impact on Destructive fires in Lawhat he saw Hundreds of thousands The Californians apply for unemployment benefits.
Instead, most Recent labor data Shows unemployment low and stable, watches at 4%. Plus, the growth of work is still obviously moving at a healthy pace.
Perhaps official labor data is not a reliable narrator for what is really happening, nor what will come.
Lisa Countryman-KirozCEO of JVS Bay Area, non -profit labor development, said there was no doubt that the actions of the new administration would cause instability for both workers and employers, with consequences that would be reduced through the industry in 2025.
A potentially unstable labor market
Labor market indicators paint a wide image and reflect past trends, but they do not accurately reflect the economic reality of different areas, populations or industries.
As someone who writes about the relationship between Labor datathe housing market And Federal ReserveI was not surprised to see the economists positively spinning the paper report on Friday. News reports have said the economy is “elastic” and “strong” and that the labor market “cannot be better”.
However, ask your average personality for finding a stable and well -paid employment and you are likely to get a very different answer. In 2024, Patriz's labor market data show that job seekers were looking for an average eight months and 294 applications for working.
It's not an exaggeration to say The economy feels like it's in the fall. The State Department's Order Order Order 90-day break for foreign aidChampion Elon Musk has left many government contractors and global agencies struggling to work or even pay their workers. In the meantime, some 65,000 Federal workers accepted an offer to resign in exchange for salary by September 30. The White House says it hopes that as many as 200,000 workers will participate in redemptionwhich was recently suspended by a federal judge.
In addition, Trump is taking aggressive action to boost the deportation of undocumented immigrants, who make up almost 1 of 20 workerswith even greater representation in construction, agriculture and catering. Forced removal of masses, which contribute billions of dollars to state and federal taxes, can result in low -wage vacancies, higher labor costs, supply chain disorders and increased inflation.
“The president has changed policy guidelines several times,” said Ein Ludwig, a former currency controller and founder of Institute for Ludwig's Common Economic Prosperity.
“It is too early to measure the net effect of his employment policy,” Ludwig told me in E -Sost.
Reducing interest rates will not come to later
Economic data, such as Friday's report, also affect major monetary decisions, such as Adjust the interest rates. The Federal Reserve should balance inflation and unemployment and examines official statistics to determine the next move.
First, the central bank wants to see that inflation is slowing before reducing interest rates. But it doesn't seem probably any time soon, given that threat of tariffswhich are expected to raise prices.
Second, the Fed requires signs of labor market weakness. Although the Fed does not want unemployment levels to dive at levels of recession, the “healthy” labor market tells the central bank that the economy can afford high borrowing rates.
The chances were already low For the Fed to lower interest rates to the next meeting in March. But it is now even clearer that the central bank will delay the rate reduction by May or June at the earliest. It may take months to get a clear picture of how administration policies will affect job market, consumer prices and borrowing costs.
“Any indicator showing a fun economy will increase the chances of a rate reduction, especially the increase in unemployment,” he said. Greg HamChief Economist in Brown Harris Stevens.
In the meantime, we will only need to settle for different definitions of what is a report on positive jobs.
“The strong labor market relies on expanding job opportunities for job seekers, not limiting them,” Countryman-Kiroz said.