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Economic data released on Friday in the US showed the economy added 49K jobs in January and the unemployment rate fell to 6.3% from 6.7%. Analysts at Wells Fargo explained the report contained a widespread weakness but they are optimistic about the future and look for hiring to strengthen in the months ahead. 

Key Quotes: 

“In somewhat better news, the unemployment rate tumbled from 6.7% to 6.3%. The January data included new population controls, but historical data were not revised. However, adjusting for the new controls shows that the drop in the unemployment rate was driven by sizable increases in both the number of employed individuals and labor force exits.”

“Revisions to the establishment survey show that the jobs market is starting out on an even weaker footing this year. While there is still a significant amount of ground to recover, we expect the labor market recovery to soon get back on track. Vaccinations are picking up and additional fiscal relief should support employment directly through business aid and indirectly through aid to households.”

“As health concerns ebb alongside the pandemic, we expect stronger hiring conditions to pull workers back into the labor market and for the participation rate to resume its recovery later this year.”