US labour market seen cooling, but not nearly enough for Fed

US hiring likely continued to moderate at the start of the year, though still-solid wage growth, an unemployment rate near historical lows and high vacancies are seen stiffening the Federal Reserve's resolve to keep rates elevated for some time.

Friday's jobs report is expected to show payrolls rose by 190,000 in January. Economists also estimate that average hourly earnings rose 0.3% for a second month and the unemployment rate slightly ticked up from a five-decade low.

While the payrolls gain would be the smallest advance in just over two years, it illustrates resilient labor demand that favors a soft landing for the economy as long as inflation keeps slowing.


"You're trying to thread a needle," said Brett Ryan, senior US economist at Deutsche Bank AG. "If it's really weak data, then you worry about recession," but too strong "it implies a more hawkish outlook for the Fed." Bloomberg