The Strong January Jobs Report May Be a Sign of a Slowdown in Demand

The January Job Report was clearly much stronger than expected, with the economy adding 517,000 jobs in January compared to consensus expectation of just 185,000. This was accompanied by a decline in the unemployment rate to 3.4% for the first time since May of 1969. That being said, job gains are likely to fall sharply over the next few months as demand grows very slowly and employers may be reluctant to boost wages or hire unqualified workers.