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517,000 jobs created in January 2023
Just days after the Fed raised interest rates again, a new government report revealed employers are still hiring more people than expected. FOX 26 Business Reporter Tom Zizka is looking at the numbers and what they mean.
HOUSTON - Just days after the Fed raised interest rates, again, the government's January jobs report says employers are still hiring many more people than expected.
The Labor Department says 517,000 jobs were created in the first month of the year. The number is more than double what was predicted, and not at all how the economy expected to act in the face of higher interest rates.
At the White House, President Biden wasted no time touting the report, ahead of Tuesday's State of the Union address, "Today's data makes it crystal clear. What I've always known in my gut, these critics and cynics are wrong."
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The January jobs report helped push the nation's unemployment rate down to 3.4%, its lowest level since early 1969. While paycheck growth slowed, slightly, those on the job are working more hours. It is, seemingly, just the opposite of Fed efforts to tighten consumer opportunities to spend and borrow.
"What the Fed is doing should be putting a brake on the economy," says Houston financial strategist Lance Roberts, "Yet, a lot of data says that's not the case quite."
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In Houston, the latest employment picture from December shows a slightly higher jobless rate of 3.9%. 16,000 new jobs were created locally, primarily in retail and warehousing, Leisure & Hospitality, and Financial Activities.
However, a new forecast from the Dallas Fed projects the state's job growth will slow significantly in the new year as interest rates squeeze the economy. "We're not going to see the kind of risky behavior, in terms of starting new businesses," says Workforce Solutions' Michelle Castrow.
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"Things look OK, right now," says Roberts, "I think later this year you're going to see more substantial economic weakness because of what the Fed is doing. All those rate hikes that the Fed was doing last year, have not even shown up in the economy, yet. That'll happen this year."
Speculation persists over what the January jobs report means, as it relates to a possible economy-slowing recession. At the very least, the hot job market reduces the chance that the Fed will pull back from raising rates any time soon. An inflation report comes in mid-February which will indicate whether consumer demand and spending are still keeping prices high.