US Job Market Remains Tight, February Jobs Report to Offer Clues on Inflation

The US job market remained tight in January, according to the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS).[0] Job openings decreased to 10.8 million in January from an upwardly revised 11.2 million in December, while the construction industry reported a decrease of almost 50%, with just 248,000 job openings in January.[1] Economists surveyed by Refinitiv expected job openings to total 10.5 million.[2]

Economists on Wall Street anticipate the February employment report will indicate that 220,000 jobs were added by employers.[3] This would be a slowdown from the January figure of 517,000, which may have been a blip caused by unseasonably warm weather. The unemployment rate is expected to remain at 3.4%, while average hourly earnings are expected to rise 0.3% from the prior month, or 4.7% year-over-year.[4]

As part of its efforts to curb high inflation, the Federal Reserve is carefully observing the trends in the US labor market.[5] The Federal Reserve is concerned that the tight labor market, which is not the original cause of inflation, might lead to an imbalance in wage negotiation that would result in additional inflationary pressure.[6]

The initial jobless claims have remained low, but this may not capture the full picture if workers receiving severance packages haven't yet filed for unemployment insurance.[3] The ADP jobs report released earlier this week showed that a projected 242,000 jobs were added by private employers in February.[0]

The February jobs report will be heavily scrutinized on Friday for clues about the momentum of the economy, and whether January's extraordinary payroll gains were a blip or a trend.[7] Investors will be looking to see if there are any revisions to January's startling report, and will be trying to gauge what the numbers mean for the Federal Reserve's next move on interest rates.[8] If the report is as expected, it will do little to quell concerns about high inflation and could even increase the odds for a half-point rate hike from the Federal Reserve at its next policy meeting in less than two weeks.[9]

0. “The number of available jobs in the US shrank in January” CNN, 8 Mar. 2023,

1. “U.S. job openings dipped in January” Axios, 9 Mar. 2023,

2. “Job openings dipped in January but remain historically high” Fox Business, 8 Mar. 2023,

3. “Job openings fell to 10.8M in January in sign labor market is cooling” USA TODAY, 8 Mar. 2023,

4. “NFP Preview: Forecasts from 10 major banks, strong job growth” FXStreet, 10 Mar. 2023,

5. “February jobs preview: What to expect after January's blowout report” CNN, 9 Mar. 2023,

6. “Job openings declined in January but still far outnumber available workers” CNBC, 8 Mar. 2023,

7. “S&P 500 Outlook: All Eyes on US Jobs Data, Good News May Be Bad News for Stocks” DailyFX, 9 Mar. 2023,

8. “Jobs Friday Is Here. What to Expect From the Report Today.” Barron's, 10 Mar. 2023,

9. “February is expected to have been a strong month for hiring and wage growth” CNBC, 9 Mar. 2023,

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