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The big jobs numbers out this week came from this morning’s U.S. Bureau of Labor Statistics' (BLS) Employment Situation report, which surprised to the upside in a major way: 353K new jobs created for January, nearly double the 180K or so analysts were looking for. A big upward revision for December accompanies this headline, from 216K originally reported to 333K today. These are far and away the strongest months for jobs gains in the past 12 months. The Unemployment Rate stayed at 3.7%, where it’s been for the past three months.
These numbers are clearly surprising, especially coming off weakening data from Wednesday’s lower-than-expected private-sector payrolls report from ADP (ADP - Free Report) , which arrived at 107K from 150K expected, and yesterday’s Weekly Jobless Claims, which inched closer to 2 million on the longer-term side for the first time in several months. Today’s BLS headline is the strongest we’ve seen since January of last year, which may clue us into a bit of seasonality in these numbers.
We see particular strength in Professional & Business Services, 74K, which ebbs and flows along the appetites of business investment. Healthcare, a steadier industry for jobs producing, reached 70K last month, followed by Retail at 45K and Government 36K. Leisure & Hospitality, normally at the very top of jobs-producing sectors, came in at 17K last month. The Mining sector actually lost -5K jobs in January.
Meanwhile, Hourly Wages — a key glimpse at inflation metrics — doubled expectations to +0.6% for the month, the highest since January of 2022. Year over year, we surprise to the upside by 40 basis points (bps) to +4.5%. (Pre-Covid, the highest this metric ever reached was +3.6%.) However, the lower print on the Average Workweek, to 34.1 hours, is the lowest since the start of the pandemic in March of 2020. Labor Force Participation was in-line with the previous month, but also down compared to previous months, 62.5%. These lower participation numbers skew the hourly earnings data somewhat; this is not the clearest look we can get at this data.
Basically, this 353K headline just knocked out hopes the Fed will start cutting rates at its March meeting. Even though Fed Chair Powell expressed doubt that March would be a good time to start cutting, the lower performance numbers from ADP and jobless claims had begun to provide a glimmer of hope. For sure, if today’s BLS figure had come in half of expectations — 90K — rather than double, chatter would indeed begin that the Fed needs to move lower from the 5.25-5.50% interest rate levels it has kept for now six straight months.
In terms of Q4 earnings this morning, Exxon Mobil (XOM - Free Report) posted mixed results: earnings of $2.48 per share bettered the $2.21 in the Zacks consensus (though well off the $3.40 reported in the year-ago quarter), on revenues of $84.34 billion which were -8% lower than expected. Chevron (CVX - Free Report) was similar ahead of today’s open, beating on earnings — $3.45 per share versus $3.29 forecast — on -10% lower quarterly sales, to $47.18 billion. Both companies are down mildly in pre-market trading.
While we’re bundling earnings reports based on industry, Big Pharma stalwart Bristol Myers (BMY - Free Report) outperformed expectations on both top and bottom lines, with earnings of $1.70 per share easily surpassing the $1.52 estimate, on $11.5 billion in revenues which edged out the $11.08 billion in the Zacks consensus. AbbVie (ABBV - Free Report) beat bottom-line estimates by 3 cents to $2.79 per share on $14.3 billion in revenues, above the $14.05 billion expected. Both companies gave modestly decent earnings guidance, and both are up somewhat in the early market.
Markets are the definition of “mixed” at this hour, with the Dow -140 points and the Nasdaq +60, with the S&P 500 flat. We’ll see if the indices can hang onto profits for the week. After today’s open, we’ll see new Factory Orders for December and final Consumer Sentiment for January, but these numbers are unlikely to profoundly shift sentiment in the way this morning’s surprisingly healthy jobs numbers have.
Image: Bigstock
BLS Jobs Up Big: 353K, 3.7% Unemployment
The big jobs numbers out this week came from this morning’s U.S. Bureau of Labor Statistics' (BLS) Employment Situation report, which surprised to the upside in a major way: 353K new jobs created for January, nearly double the 180K or so analysts were looking for. A big upward revision for December accompanies this headline, from 216K originally reported to 333K today. These are far and away the strongest months for jobs gains in the past 12 months. The Unemployment Rate stayed at 3.7%, where it’s been for the past three months.
These numbers are clearly surprising, especially coming off weakening data from Wednesday’s lower-than-expected private-sector payrolls report from ADP (ADP - Free Report) , which arrived at 107K from 150K expected, and yesterday’s Weekly Jobless Claims, which inched closer to 2 million on the longer-term side for the first time in several months. Today’s BLS headline is the strongest we’ve seen since January of last year, which may clue us into a bit of seasonality in these numbers.
We see particular strength in Professional & Business Services, 74K, which ebbs and flows along the appetites of business investment. Healthcare, a steadier industry for jobs producing, reached 70K last month, followed by Retail at 45K and Government 36K. Leisure & Hospitality, normally at the very top of jobs-producing sectors, came in at 17K last month. The Mining sector actually lost -5K jobs in January.
Meanwhile, Hourly Wages — a key glimpse at inflation metrics — doubled expectations to +0.6% for the month, the highest since January of 2022. Year over year, we surprise to the upside by 40 basis points (bps) to +4.5%. (Pre-Covid, the highest this metric ever reached was +3.6%.) However, the lower print on the Average Workweek, to 34.1 hours, is the lowest since the start of the pandemic in March of 2020. Labor Force Participation was in-line with the previous month, but also down compared to previous months, 62.5%. These lower participation numbers skew the hourly earnings data somewhat; this is not the clearest look we can get at this data.
Basically, this 353K headline just knocked out hopes the Fed will start cutting rates at its March meeting. Even though Fed Chair Powell expressed doubt that March would be a good time to start cutting, the lower performance numbers from ADP and jobless claims had begun to provide a glimmer of hope. For sure, if today’s BLS figure had come in half of expectations — 90K — rather than double, chatter would indeed begin that the Fed needs to move lower from the 5.25-5.50% interest rate levels it has kept for now six straight months.
In terms of Q4 earnings this morning, Exxon Mobil (XOM - Free Report) posted mixed results: earnings of $2.48 per share bettered the $2.21 in the Zacks consensus (though well off the $3.40 reported in the year-ago quarter), on revenues of $84.34 billion which were -8% lower than expected. Chevron (CVX - Free Report) was similar ahead of today’s open, beating on earnings — $3.45 per share versus $3.29 forecast — on -10% lower quarterly sales, to $47.18 billion. Both companies are down mildly in pre-market trading.
While we’re bundling earnings reports based on industry, Big Pharma stalwart Bristol Myers (BMY - Free Report) outperformed expectations on both top and bottom lines, with earnings of $1.70 per share easily surpassing the $1.52 estimate, on $11.5 billion in revenues which edged out the $11.08 billion in the Zacks consensus. AbbVie (ABBV - Free Report) beat bottom-line estimates by 3 cents to $2.79 per share on $14.3 billion in revenues, above the $14.05 billion expected. Both companies gave modestly decent earnings guidance, and both are up somewhat in the early market.
Markets are the definition of “mixed” at this hour, with the Dow -140 points and the Nasdaq +60, with the S&P 500 flat. We’ll see if the indices can hang onto profits for the week. After today’s open, we’ll see new Factory Orders for December and final Consumer Sentiment for January, but these numbers are unlikely to profoundly shift sentiment in the way this morning’s surprisingly healthy jobs numbers have.
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