The graph shows the number of private employees always falls quite dramatically every January, after holiday shopping, and 2023 was certainly no exception. This January’s job loss was slightly less than January 2007 or January 2020 (if such pre‐​recession data provide any comfort), so it looks like a big gain in such relative terms. The fallacy that “employers added a robust 517,000 jobs last month” confounded a statistician’s seasonal adjustment with an actual increase in the number of people collecting paychecks. There were nearly 2.2 million fewer people on private payrolls in January than December, and that did not “boost their overall incomes.” …

Hourly earnings in the private sector slowed to a 3.6% annual rate (0.3% this January), down from 4.8% in December, 5.2% in November and 8% in January of 2022. There is no shred of evidence of accelerating private wage gains, without which Fed officials’ banal “tight labor market” mantra is pointless.

[I am very skeptical of that 517K claim from the BLS too, for different reasons but leading back to the same conclusion. Adding that many jobs should have significantly impacted the labor participation ratios, but they didn’t budge at all. The annual adjustments also added 1.2 million people to the overall labor supply at the same time as less than half of those added as employed. It’s entirely an artifact of the annual BLS adjustments, and I’m very sure Jerome Powell will see right through it. Look to ADP’s report of 106,000 new jobs added in January as a more accurate reflection of the current employment situation. — Ed]