by Calculated Risk on 2/01/2024 04:30:00 PM

On Friday at 8:30 AM ET, the BLS will release the employment report for January. The consensus is for 162,000 jobs added, and for the unemployment rate to increase to 3.8%.

There were 216,000 jobs added in December, and the unemployment rate was at 3.7%.

• ADP Report: The ADP employment report showed 107,000 private sector jobs were added in January.  This suggests job gains below consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report.

• ISM Surveys: Note that the ISM services are diffusion indexes based on the number of firms hiring (not the number of hires).  The ISM® manufacturing employment index decreased in January to 47.1%, down from 47.5% last month.   This would suggest about 30,000 jobs lost in manufacturing. The ADP report indicated 2,000 manufacturing jobs added in January.

The ISM® services employment index will be released after the employment report.

• Unemployment Claims: The weekly claims report showed a smaller number of initial unemployment claims during the reference week from 203,000 in December to 189,000 in January.  This suggests fewer layoffs in January compared to December.

•  COVID: As far as the pandemic, the number of patients hospitalized during the reference week in January was around 28,000, up from 19,000 in December.  

• Conclusion: Fewer unemployment claims and favorable weather during the reference week suggest a positive report in January.   My guess is the headline number will be above the consensus.