Joe Biden declares America’s economy ‘is the strongest in the world’ after jobs report smashes forecasts – as it happened

AI SaaS

Biden: America’s economy is the strongest in the world.

President Joe Biden has welcomed another month of strong job creation, pointing out that the US has added almost 15 million jobs since he was sworn in.

Responding to today’s strong non-farm payroll report, showing 353,000 new jobs were created in January, he says:

America’s economy is the strongest in the world.

Today, we saw more proof, with another month of strong wage gains and employment gains of over 350,000 in January, continuing the strong growth from last year. Our economy has created 14.8 million jobs since I took office, unemployment has been under 4% for two full years now, and inflation has been at the pre-pandemic level of 2% over the last half year. It’s great news for working families that wages, wealth, and jobs are higher now than before the pandemic, and I won’t stop fighting to lower costs and build an economy from the middle out and bottom up. I’ll continue to stand in the way of efforts by Congressional Republicans to enact massive tax giveaways for the wealthy and big corporations; cut Medicare, Medicaid, and Social Security; and raise costs for American families.

Here’s US secretary of commerce Gina Raimondo:

Big news: We added over 350,000 jobs in January — shattering expectations and continuing President Biden’s historic job creation streak.

— Secretary Gina Raimondo (@SecRaimondo) February 2, 2024

Updated at 

Key events

Closing post

Time to recap.

The US added 353,000 jobs in January, almost twice as many than forecast, in a sign that the economy is stronger than thought – and that interest rates may remain higher for longer.

The latest non-farm payroll report blew expectation away – economists had expected around 180,000 new jobs to be created last month. November and December’s data was revised higher too.

US January Jobs Report: Rising rates mid year resulted in a modest decline of 7K in professional business service jobs. Since then the sector has added 119K. Whatever “mid-cycle” scare happened, it ended as firms responded to robust economic demand and resumed hiring. It’s a… pic.twitter.com/U3LCZMg5xi

— Joseph Brusuelas (@joebrusuelas) February 2, 2024

Wage growth was also pacier, increasing by 4.5% per year or by 0.6% in January alone.

President Biden welcomed the report, saying:

America’s economy is the strongest in the world. Today, we saw more proof, with another month of strong wage gains and employment gains of over 350,000 in January, continuing the strong growth from last year.

News of the strong jobs market could help Biden in this year’s presidential race, which we are covering here:

Economists said the strong jobs report made it very hard to see the US Federal Reserve starting to cut interest rates at its next meeting in March, while a May rate cut was also seen as less likely.

Daniele Antonucci, chief investment officer at Quintet Private Bank, explains:

The strength of the US labour market continues to undermine the market’s view that interest rates will be cut soon and sharply. Job and wage growth, once again, were both stronger than expected, and the unemployment rate was lower.

This looks like a genuine surprise relative to the consensus, with employment figures almost double economists’ forecasts, far outstripping the highest projections across the main analyst polls.

Even though we think the Fed is likely to start lowering its policy rate at some point this year, we believe that job creation in the US is currently too strong to expect that to happen in the near term.

Here’s the full story:

Here’s the rest of today’s business news:

Traders have scaled back their bets on a US interest rate cut in May, putting the odds at around 88%, the Financial Times points out.

Before the report, a cut in May had been fully priced in.

Did you “price in” Fed rate cuts for March or May? Well, it might be time to price them out.

At yesterday’s FOMC meeting, Jerome Powell stressed that the Fed was not looking for a weaker labor market before cutting rates. After today’s job report, would he say the same? 🧵 pic.twitter.com/FOeSurgGby

— Kalshi (@Kalshi) February 2, 2024

Newsflash: Back in the UK, Tata Steel has announced the start of a 45-day formal consultation on restructuring its business.

This restructuring is set to lead to up to 2,800 job losses in total. Tata is shutting two blast furnaces,replacing them with an electric arc furnace that will produce steel by melting recycled steel scrap.

It’s understood that 2,500 jobs are being lost between April 2024 and September 2025, including almost 2,000 redundancies at Port Talbot.

Earlier this week TV Narendran, Tata Steel’s global chief executive, defended his decision to make thousands of workers redundant at Port Talbot, saying the steelworks had lost £160m in the last quarter.

Economist Elise Gould has written a neat thread, pulling together the key points in today’s US jobs report:

A strong labor market continues into 2023 with 353,000 jobs added in January, according to the latest @BLS_gov data. It’s a strong start to the year, up from average job growth of 255,000 per month in 2023 (a bit down from originally reported because of the benchmark revisions). pic.twitter.com/9mbHKsGVHX

— Elise Gould (@eliselgould) February 2, 2024

The unemployment rate held steady in January at 3.7%.

26 months in a row of 4.0% or below unemployment!

Changes in the population controls caution comparisons over time, but they had no impact on the overall unemployment, employment, or labor force participation rates. pic.twitter.com/CTceC6LkEd

— Elise Gould (@eliselgould) February 2, 2024

Payroll job gains in January were 353,000 and December’s gains were revised up to 333,000. Employment growth in Jan was strongest in health care and social assistance, professional and business services, retail trade, and govt. Mining and logging was the only sector with losses. pic.twitter.com/gaipyWwIIW

— Elise Gould (@eliselgould) February 2, 2024

While pre-pandemic levels may be a low benchmark considering economic and population growth since then, the closing of some of those gaps is still encouraging. Every sector–including leisure and hospitality–is now less than 100,000 jobs from its February 2020 level. pic.twitter.com/PnRaEALhT0

— Elise Gould (@eliselgould) February 2, 2024

Overall govt jobs up 36k in January including 25k in state + local employment. It’s promising to see these job gains but there’s been significant population growth and local education employment fell further behind in January so hopefully we will see more jobs in coming months. pic.twitter.com/RvH6pYu7ru

— Elise Gould (@eliselgould) February 2, 2024

YoY nominal wage growth ticked up a bit. The gap between prod/nonsupervisory—roughly the lower 80% of the wage distribution—and overall wage growth narrowed in the last year. Nominal wage growth is consistent with inflation and productivity growth and clawing back labor share. pic.twitter.com/TnhWvb3faj

— Elise Gould (@eliselgould) February 2, 2024

While the unemployment rate held steady, the share of the population with a job ticked up in January. The share of the population 25-54 years old ticked up as well and, at 80.6%, is now again above it’s pre-pandemic benchmark. pic.twitter.com/Dfy39OobH7

— Elise Gould (@eliselgould) February 2, 2024

The increase in employment for 25-54 year olds was found among men and women in January. Men’s EPOP is now at 86.2%, just 0.5 percentage points below its pre-pandemic peak. Women’s EPOP rose to 75.0% in January, but population controls likely mean there was no significant change. pic.twitter.com/5wTMjvd9k6

— Elise Gould (@eliselgould) February 2, 2024

While the overall unemployment rate held steady in January, there were small changes among groups by race and ethnicity. Black and Hispanic unemployment rates are now at 5.3% and 5.0%, respectively, much higher than white or Asian unemployment, at 3.4% and 2.9%, respectively. pic.twitter.com/x58Ne1nBmy

— Elise Gould (@eliselgould) February 2, 2024

US payrolls have started the new year with “a bang”, says David Page, head of macro research at AXA Investment Managers.

Page adds:

  • Payroll gains surprised to the upside, rising by 353,000 in January, with December revised up 117,000 and broader revision to last year up 359,000.

  • Gains were well spread over sectors, more broadly than just government and healthcare sectors of recent months.

  • The household measure of employment was weaker and showed marked divergence from the establishment survey.

  • Yet declines in labour supply meant unemployment remained low at 3.7%

  • Average earnings provided a further surprise, rising by 0.6% m/m, up 5.4% (3m annualised).

  • Despite focus on good inflation progress to date, the Fed cannot afford to ignore this robust performance.

  • This adds to our view that the Fed will not ease policy until June this year, and will cut four times, rather than the five still priced by markets across the course of this year.

January’s jobs report shows the highest number of new jobs in a year, as Larry Adam, chief investment officer at Raymond James, shows here:

Jobs, Jobs, Jobs! Job growth surprises to the upside. Today’s monthly non-farm payrolls report showed the economy added 353k jobs in January. This is the highest number of jobs added since January of last year. December’s figure was also revised significantly higher. pic.twitter.com/SgziPDZYXi

— Larry Adam (@LarryAdamRJ) February 2, 2024

The US dollar is continuing to rally; it just hit its highest level against a basket of currencies since mid-December.

A March cut in US interest rates now looks extremely unlikely, says Michael Hewson chief market analyst at CMC Markets UK.

If March wasn’t off the table as far as rate cuts were concerned before today’s payroll numbers, it’s not even in the same room now.

That said this wasn’t bad news for US markets given that the prospect of a recession looks even further away than ever, but also means that on an economic basis a resilient US economy should mean company earnings hold up.

It also helps to explain why even though the S&P500 gave up most of its premarket gains, it still managed to open higher, along with the Nasdaq 100.

In another boost, US consumer sentiment soared in January to its highest level in two and a half years.

The University of Michigan Consumer Sentiment Index has risen by 9.3 points in January to 79.0, the highest since July 2021.

The increase reflects “improvements in the outlook for both inflation and personal incomes”.

The closely watched University of Michigan Index of Consumer Sentiment released this morning rose in January to the highest point since July 2021, suggesting consumers have an increasingly rosy outlook on the economy. https://t.co/35A6UKAixp

— Rex Bossert (@rbossert) February 2, 2024

Biden: America’s economy is the strongest in the world.

President Joe Biden has welcomed another month of strong job creation, pointing out that the US has added almost 15 million jobs since he was sworn in.

Responding to today’s strong non-farm payroll report, showing 353,000 new jobs were created in January, he says:

America’s economy is the strongest in the world.

Today, we saw more proof, with another month of strong wage gains and employment gains of over 350,000 in January, continuing the strong growth from last year. Our economy has created 14.8 million jobs since I took office, unemployment has been under 4% for two full years now, and inflation has been at the pre-pandemic level of 2% over the last half year. It’s great news for working families that wages, wealth, and jobs are higher now than before the pandemic, and I won’t stop fighting to lower costs and build an economy from the middle out and bottom up. I’ll continue to stand in the way of efforts by Congressional Republicans to enact massive tax giveaways for the wealthy and big corporations; cut Medicare, Medicaid, and Social Security; and raise costs for American families.

Here’s US secretary of commerce Gina Raimondo:

Big news: We added over 350,000 jobs in January — shattering expectations and continuing President Biden’s historic job creation streak.

— Secretary Gina Raimondo (@SecRaimondo) February 2, 2024

Updated at 

The recovery continues…

Stepping, back it’s truly incredible how strong this jobs recovery from the pandemic has been.

14.8 million jobs added since Biden took office
5.4 million more jobs than pre-pandemic

You can see it in the chart. pic.twitter.com/PLQK9NP1mp

— Heather Long (@byHeatherLong) February 2, 2024

One interesting wrinkle in the otherwise strong jobs report is that the average working week fell in January.

The average number of hours worked fell by 0.2 to 34.1, its lowest since March 2020. This may be because many of the jobs created were part time positions, or by because demand for labour weakened…

– A big drop in the work week to just 34.1 hours, the lowest number since 2010 outside of the pandemic recession. It could reflect all the snow days workers got in a cold, stormy winter. Or it could reflect declining demand for labor and signal looming job cuts.

— Julia Pollak (@juliaonjobs) February 2, 2024

Rate cut probabilities:

Probability of a March cut is now <20%. How is this not 0 one month before the next Fed meeting? At this rate of job growth May should be off the table as well… pic.twitter.com/198EJmDOqh

— Special Situations 🌐 Research Newsletter (Jay) (@SpecialSitsNews) February 2, 2024

Wall Street is taking the US jobs report pretty calmly.

The S&P 500 index has gained 10 points, or 0.2%, in early trading to 4,916 points, even though US interest rates may remain higher for longer.

Facebook owner Meta is surging, up 19%, after its strong financial results last night.

The tech-focused Nasdaq Composite has gained 0.67%. However, the Dow Jones Industrial Average has dipped by 0.3%

The surprising strength in the US labor market reported today has predictable effects on the USD, rates, gold, and the Dow…

But I’m surprised to see the S&P 500 and the Nasdaq in the green on this “higher for longer” news.

Thoughts? pic.twitter.com/spKPeIOtk7

— Lobo Tiggre (@duediligenceguy) February 2, 2024

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