The White House is looking to dampen expectations ahead of the latest jobs report on Friday, which could show a loss for the first time since President Joe Biden took office.
The January jobs report is likely to fare poorly in comparison with other months because it coincides with the omicron variant’s spike, meaning that millions of people were out of work in January because of COVID-19, including those who took time off work to take care of sick family members.
Brian Deese, the director of the National Economic Council, tried to preempt the news during an appearance on MSNBC. He told viewers that Friday’s numbers might be “confusing” because the jobs report can count people who are out sick and not collecting pay as unemployed when in reality, they still have jobs.
“We expect that that will have an impact on the numbers,” Deese said Tuesday. “We never put too much weight on any individual month; this will particularly be true in this month because of the likely effect of the short-term absences from omicron.”
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Forecasters are split over just how bad the Friday report will be. The consensus expectation is hovering at about just 150,000 nonfarm payroll jobs added, although Capital Economics predicts that jobs may have actually fallen by 200,000 last month.
On Wednesday, payroll processing firm ADP said that private payrolls fell by more than 300,000 in January — much worse than anticipated and a harbinger for Friday’s report.
During a news conference on Monday, White House press secretary Jen Psaki said that almost 9 million people were out of work at some point last month because of the pandemic.
“So, we just wanted to kind of prepare, you know, people to understand how the data is taken,” she said. “As a result, the month’s jobs report may show job losses in large part because workers were out sick from omicron.”
If job growth is in the red for January, it would be the first jobs report since Biden took office where there wasn’t some level of monthly job growth — something that Republicans will undoubtedly use as a cudgel as they gear up to challenge Democrats for Congress in the November midterm elections.
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Biden is also facing problems with high inflation. Prices have increased by a whopping 7% in the year ending in December, the fastest pace since 1982, according to the Bureau of Labor Statistics.
Federal Reserve officials met last week and signaled that the central bank will “soon” hike interest rates for the first time in years, which likely means the federal funds rate will move upward come March. Investors are pricing in several rate hikes this year, which could bring interest rates to a range of 1-1.25%.
