Less-than-great expectations for upcoming jobs data
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What is the main topic discussed in this episode?
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The days of delayed government data aren't over. Up this week, jobs and inflation. From American Public Media, this is Marketplace.
In Los Angeles, I'm Amy Scott, in for Kai Risdahl. It's Monday, February 9th. Good to have you with us. I want to call your attention to two items to watch on the economic calendar this week. First, the January jobs report, delayed by last week's partial government shutdown, comes out Wednesday, followed by the latest consumer price index, also delayed, now scheduled for Friday. Both are key readings on the health of the economy, and both are expected to be OK, as in modest but not great job growth and moderating but not yet low enough inflation. Marketplace's Mitchell Hartman has more.
The economy has been adding an anemic 50,000 jobs a month on average over the last year, just one-third of the rate in 2024. And more of the same is expected for January, says Boston College economist Brian Bethune.
The whole employment market has been sort of put on hold. Limited hiring going on by large business, actually reductions in employment levels in the small business world.
What's more, the January jobs report also comes with something called annual benchmark revisions, which are expected to reduce the number of jobs added to the economy last year by 6,000 to 900,000, says economist Joe Bersuelas at consulting firm RSM. meaning we're probably going to see a net decline in jobs for the entire year of 2025. Bruce Willis says there are a bunch of reasons why the job market has stagnated, starting with a declining supply of workers for employers to hire. You've got the long-run demographic issues caused by the retirement of the boomers. Second, very tight immigration policy, which is a choice on the part of the Trump administration. Also, he says, companies overhired during the post-pandemic recovery, and now they're slimming down.
Plus, they've invested heavily in automation and AI, which is increasing productivity and reducing their need for more workers right now. Turning to the inflation data we'll get later this week, economists expect a decline in headline consumer price inflation for January from 2.7 to 2.5 percent year over year. But for consumers in the real economy, it might not feel like that, says Joe Bersuelis. Most Americans would say there's a common baseline around rent prices, electricity is increasing, and food is increasing. So for them, that means inflation is probably closer to 3.5 to 4%. And with wages rising about the same amount on average, that means most workers, even if they can hold on to their jobs, don't feel like they're getting ahead in this economy.
I'm Mitchell Hartman for Marketplace.
Another economic indicator coming out of Washington this week will be investor demand when the Treasury Department auctions off a wave of government bonds, with a big batch of 10-year bonds on Wednesday and 30-year bonds on Thursday. In advance of those auctions, Bloomberg reports today that the Chinese government has been advising banks to hold off on buying any more U.S. treasuries. And in some cases, to trim their holdings. The worry is that holding too many T-bills and notes in a volatile market could expose banks to losses. Marketplace's Justin Ho spent the day looking into those concerns.
Over the past year or so, a lot of foreign investors have either sold or threatened to sell U.S. treasuries.
This has been a perennial theme in a period of geopolitical volatility.
Guy Labat is chief fixed income strategist at Janie Montgomery Scott. Some European investors said they'd pull away from treasuries after President Trump's threats to take over Greenland.
What are the expectations for the upcoming January jobs report?
Many foreign investors sold treasuries after the president's Liberation Day tariff announcement. Labat says that matters because demand for government bonds affects bond yields.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–4:15
2
What are the expectations for the upcoming January jobs report?
4:15–9:41
3
How will revisions to 2025 jobs data affect employment figures?
9:41–11:49
4
What factors are contributing to the stagnation of the job market?
11:49–14:45
5
What inflation trends are expected in the upcoming consumer price index?
14:45–19:15
6
How is foreign investment in U.S. Treasurys performing?
19:15–21:35
7
What are the implications of foreign banks reducing U.S. Treasury purchases?
21:35–26:05