There is a lot to unpack in today’s US jobs report. January non-farm payrolls came in at 143k, below the 175k consensus, but there were 100k of upward revisions to the past two months and the unemployment rate came in at 4% versus 4.1% previously and expected. Average hourly earning rose 0.5% month-on-month, but the average working week dropped to 34.1 hours – matching the lows of the pandemic period. That in itself looks a pretty solid report and would justify the Federal Reserve holding rates steady for now.

We also get a whole load of revisions – the payrolls series is being adjusted for updates to the births-deaths model and changes to seasonal adjustment factors, while the unemployment rate is adjusted to take account of new population estimates, although changes were small.

With regards to the non-farm payrolls, the benchmark revisions were not as severe as initially proposed. The provisional estimate from August was for 818k of downward revisions over the 12 months to March 2024, but this is now reported as 598,000. Revisions to subsequent data mean that for 2024 as a whole the average monthly payrolls gain is now 166,000 versus 186,000 previously reported. More significantly October, November and December jobs have been revised higher, so we have a stronger trend at the end of 2024 than previously thought. As such it doesn’t support the case for any near-term Fed easing.