The Week Ahead: Looking for resilience and revisions in the latest employment numbers

There has been no winter chill in the American job market. Companies created more than a half million new jobs to begin the year. And there were 11 million vacant job openings in December. The latest employment data will be in focus in the week ahead.

First up – JOLTS. The Job Openings and Labor Turnover Survey captures demand by employers for workers. It is a gauge of how the demand for workers is matching up with the supply of labor. And there continues to be a big mismatch.

The January JOLTS report will be released Wednesday. Mild weather may have helped support construction hiring even as higher interest rates have increased real estate borrowing costs. Tech job losses will weigh on the market, as could the end of holiday season hiring. Still, the number of vacant jobs is likely to continue to be well above the number of unemployed workers, highlighting the tight job market conditions helping push up wages, and undergirding inflation.

Then on Friday comes the February employment report. The January data showed a surprisingly strong job market with companies creating 517,000 new jobs. The February report is expected to show a significant slowdown in the hiring pace – perhaps falling by more than 50 percent. However, an economy creating 200,000 new jobs in a month can hardly be seen as one teetering on the edge of recession. Instead, it would indicate the resilient ability of companies to create new positions. And it would provide more evidence to the Federal Reserve that it can raise interest rates more to fight inflation without triggering widespread layoffs.

These employment reports also will be examined for any revisions to past releases. Government statisticians routinely touch up monthly data as more complete information comes in. For instance, in January, the Bureau of Labor Statistics revised its job count for November and December, adding 71,000 more jobs than were first reported.

Continued strength in employment underpins the Federal Reserve’s determination to keep raising interest rates to cool inflation. The market is pricing in a stronger response from the central bank later this month than was predicted four weeks ago. Odds are climbing that the regulators could return to raising rates by a half percentage point, according to the CME FedWatch Tool.

After a rip-roaring stock rally in January based upon the belief the Fed was close to ending its rate hikes, investors have revised their outlook as inflation – and employment – have remained resilient.

Tom Hudson is a financial journalist and chief content officer at WAMU public radio in Washington, D.C. Follow him on Twitter @HudsonsView.