A Clouded, but Optimistic Outlook

January economic data are relatively unreliable, but recent figures paint a fairly consistent picture of where we are headed in the near term. While there is reason to be optimistic, it’s still a mixed bag, with some concerns about what we’ll see coming out of Washington over the next several months.

The economy shed nearly three million jobs in January, a bit less than we saw a year ago. Construction fell by 241,000, retail by 546,000, couriers by 184,000, and education (public and private) by 683,000. None of this seems out of line. The bigger question is what will happen over the next few months. The hiring outlook is strong, but may be restrained.

Labor force participation picked up in January, but one should take that with a grain of salt. Judging by the employment/population ratio, there is likely some slack remaining in the job market. However, demographic changes and increased educational enrollment make it difficult to compare where we are now with where we were a decade ago.