but I do want to bring in lindsey Piegza, chief economist
at Stifel to break down more of these numbers for us, lindsey Good morning.
Your initial reaction to this number,
especially given the fact that we were maybe expecting losses here.
Well, you're exactly right that this was a stellar report,
not only on a nominal basis at the start of the year,
but on a relative basis when we look at those very
dismal expectations for hiring to slow amid the latest variant,
But up over 460,000,
this brings us back in line with that 500,000 pace that
we had established across the first three quarters of last year,
again reinforcing the notion that businesses are hiring in fact desperate
to hire workers and there still are billions of workers.
However, sitting on the sideline and we did see that uh that juxtaposition
play out a little bit in the unemployment rate,
we did see some of those workers come back in
the participation rate take a little bit higher,
which is why we did see that unemployment rate pushed back up to the 4% level
overall, I would say a pretty solid report.
Yeah, lindsey,
I also want to get your take on the revisions for december because I
I'm floored by this because now we essentially have two months of revisions,
700,000 jobs essentially added that weren't there before december,
we only had about 100 and 50,000 jobs added in the initial report.
Now, the revisions are over 500,000 here.
So does this kind of show you that it's sort of difficult to gauge this,
this job market right now because of omicron
because of all these other factors here,
when it comes to these numbers?
Oh, absolutely.
Prior to the crisis, it was very typical that we had monthly revisions around 100,.
But when we're talking about monthly revisions of over 500,000 jobs,
this really highlights the the complicated process that economists,
analysts are having at this time
to compile accurate data to reflect what's happening in the labor market.
As the virus continues to complicate that process for us,
When we look at sort of the sectors in all of this,
it seems like it's sort of broad in terms of the gains here, restaurants,
108,000 businesses.
100 or 86,000, retail, 61,000, construction.
It looks like just based off of my initial look on this looks
to be the only area that saw losses maybe about 5000 or so.
But what is your sort of take in terms of the sectors here being so broad?
Oh, I think it's widespread gains across a variety of sectors, as you mentioned,
really, reinforcing the, the strong recapture rates
that we've seen in this country,
particularly in some of the hardest hit industries.
You mentioned earlier, leisure and hospitality,
travel with recapture rates well over 80% we
are taking sizable steps in the right direction
to try and return to pre pandemic levels of employment.
But remember even with this morning's stellar report, we're still millions below
that level that we had reached prior to the onset of covid 19.
So yes, we are recapturing jobs.
We still have further ground that needs to be made
before we can talk about reaching that previous peak.
Okay,
so based off of these last couple of months and sort
of the changing landscape of the labor market right now,
do you think that that changes jerome Powell's perspective when it comes to
March in the theory that he raises interest rates by a quarter percent.
Do you sort of think it changes the Fed strategy here?
No, I don't think it does.
I think this reinforces the Feds notion that it's no longer appropriate to have the
accommodative measures in place that were initiated at
the onset of the crisis were no,
nowhere near those conditions.
We don't need the bond buying program anymore.
We certainly don't need interest rates at zero levels.
Does this cause the Fed to take a more hawkish tone?
A more aggressive aggressive approach. I also don't think it does.
I think the Fed is very much poised to raise rates potentially three times this year,
maybe more depending on the underlying growth rate,
but it also is very much going to depend on headline inflation.
The trajectory of inflation.
If in fact we do see some relief as the Fed expects
in headline price pressures in the form of a second derivative decline or simply
slower pace of positive price growth,
The Fed is not going to need to raise rates
quite as fast as they would have otherwise if inflation continued
to rise throughout the year Lindsay,
are you one of those economists that think that the
job growth and the economy not not necessary the economy,
but job growth in this country is going to cool down just a little bit
given the fact that we had so many months of gains during the pandemic.
But you had so many contributing factors that were helping that you had reopenings,
you had fiscal stimulus, you had vaccinations,
you had sort of all these contributing factors here.
Do you think maybe the job market cools down this year?
Because those aren't basically factors really much anymore here?
Well, those are the factors certainly that that are expected to cool.
But remember we also have millions of americans that are sitting on the sidelines,
still very much concerned about
spreading or contracting the virus.
We still have ongoing childcare issues.
We still have a number of americans relying
off of savings that were accumulated as the,
as the result of many of these government programs.
So as schools permanently reopened as vaccination rates rise,
caseloads decline And now that we see many of these support metrics
in place begin to fade.
I think that's also going to create an incentive to come back into the labor market,
potentially keeping hiring at strong at a strong enough pace
throughout the year.
Maybe not quite as robust as we see this morning at a near 500,000 gain,
but certainly the expectation for solid, strong gains going forward.
Lindsey. Great to have you here.
Thank you so very much for joining us, lindsey Piegza, chief economist
at Stifel, joining us this morning, going through these numbers.