A Blazing Jobs Report in an Odd Economic Moment

Happy Monday! We are devastated to report that new photographic evidence emerged in recent days that could throw Billy Mitchell’s July 2007 Donkey Kong score of 1,050,200 points into question. How could you use an illicitly modified joystick, Billy? Children looked up to you.

Quick Hits: Today’s Top Stories

  • Defense Secretary Lloyd Austin confirmed Saturday an F-22 fighter jet shot down the Chinese surveillance balloon—which entered U.S. airspace last week—over U.S. territorial waters off the South Carolina coast. The Pentagon is now working to recover the remnants of the balloon, hoping to examine them for new intelligence on Chinese equipment. The Chinese government criticized the Biden administration for shooting down what the CCP claimed was a “civilian weather balloon” that had been blown off course, arguing the United States’ response was an “obvious overreaction.” Secretary of State Antony Blinken indefinitely postponed his upcoming trip to Beijing for a bilateral meeting due to what the State Department labeled “an irresponsible act and a clear violation of U.S. sovereignty and international law.” Some Republicans knocked the White House for waiting several days to shoot down the balloon, while President Joe Biden told reporters Saturday he ordered the Pentagon on Wednesday to shoot it down “as soon as possible.” The administration, he said, waited until it was over water to avoid any injury from falling debris.
  • The Bureau of Labor Statistics reported Friday that U.S. employers added 517,000 jobs in January, up from 260,000 in December and well above economists’ expectations. The unemployment rate ticked down from 3.5 percent to 3.4 percent—the lowest level in 53 years—as the labor force participation rate remained relatively unchanged at 62.4 percent. Average hourly earnings—a key measure for hints on inflation—were up 4.4 percent year-over-year, slowing slightly from December’s 4.6 percent annual rate.
  • Hundreds of people were killed in southeast Turkey and Syria on Monday after a 7.8-magnitude earthquake and several aftershocks struck the region, toppling buildings and forcing residents to flee their homes. The casualty count is expected to rise as recovery efforts get underway.
  • The Defense Department announced a new $2.1 billion security assistance package for Ukraine on Friday, tapping into previously approved congressional aid to send Ukraine a new longer-range bomb, as well as additional HIMARS ammunition and artillery rounds, heavy machine guns, Mine Resistant Ambush Protected (MRAP) vehicles, Javelin anti-armor systems, Claymore anti-personnel munitions, and more. The United States has now sent Ukraine nearly $30 billion in military aid since Russia’s invasion last year.
  • The Pentagon estimates roughly 180,000 Russian troops have been killed or wounded in Ukraine since the Kremlin launched its invasion last year, and that number will likely increase as Russian forces reportedly prepare for an offensive on five fronts in the coming weeks. Any such offensive would focus on the embattled city of Bakhmut in eastern Ukraine, where an American aid worker, Pete Reed, was killed Thursday while trying to evacuate civilians.
  • Saad Maan, spokesman for the Iraqi interior ministry, confirmed Friday that 22-year-old YouTuber Tiba Ali was killed by her father in Diwaniyah, Iraq, reportedly in retaliation for her lifestyle in Istanbul, where she lived. Dozens of demonstrators gathered to protest what they called an “honor killing” enabled by the Iraqi penal code.  
  • Emily Seidel, CEO of the Koch-backed Americans For Prosperity PAC, issued a memo Sunday indicating the conservative advocacy organization will unleash millions of dollars in campaign spending to defeat Donald Trump in the upcoming Republican presidential primary. “The Republican Party is nominating bad candidates who are advocating for things that go against core American principles,” the memo reads. “The American people have shown that they’re ready to move on, and so AFP will help them do that.” The Koch network had stayed out of GOP presidential primaries in recent years.
  • The Working Families Party announced Friday that freshman Democratic Rep. Delia Ramirez of Illinois will give their response to President Joe Biden’s State of the Union Tuesday. The small progressive party has offered responses to the annual address in previous years, including from high-profile Democratic representatives like Rep. Rashida Tlaib of Michigan and Rep. Jamaal Bowman of New York.

An ‘Anyone’s Guess’ Economic Outlook

US President Joe Biden arrives to speak about the January 2023 jobs report in the South Auditorium of the Eisenhower Executive Office Building, next to the White House in Washington, DC, on February 3, 2023. (Photo by Jim Watson / AFP via Getty Images.)

The Labor Department reported Friday the unemployment rate hit 3.4 percent in January for the first time since May 1969, the month The Who released the rock opera Tommy. The plunging joblessness rate was surely attributable, at least in part, to the rise in pinball wizards at the time.

But in a classic case of good news potentially being bad news, that strong number could actually increase our odds of recession if it leads the Federal Reserve to conclude additional interest-rate hikes are necessary. Chalk it up to a weird economic moment doing its best to mess with economists’ predictions.

Employers added a blazing 517,000 jobs in January, and though seasonal factors are likely warping that number a bit, it’s still an unexpectedly strong result that breaks a five-month streak of slowing job gains. The acceleration could worry Fed officials relying on a slack jobs market to aid cooling inflation—but in a positive sign for the central bank, annual wage growth continued its downward trajectory last month. Toss in falling consumer spending, a near-record number of job openings, and a waning housing market, and you’ll start to see why recession predictions are all over the map.

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