U.S. stock futures fall ahead of jobs report today. Unemployment rate expected to rise.

  • In Business
  • 2023-02-03 12:47:39Z

It's been a big week for economic news, an economic Olympics if you will.

Competition has been fierce for which report can provide the best window into the future of the U.S. economy. After lots of action this week, there's one final event left before the closing ceremony: the jobs report.

The report is certainly a front-runner for a gold medal.

Economists predict this will be one of the first reports where we observe a more significant hiring slowdown. Still, the unemployment rate is expected to remain near historic lows.

Follow along as we review the top competitors in this week's economic Olympics and what to expect from the final event.

A hiring sign is displayed outside of a retail store in Vernon Hills, Ill.
A hiring sign is displayed outside of a retail store in Vernon Hills, Ill.  

December jobs report:Nonfarm payroll employment increased by 223,000

What a 2023 recession would mean: Job losses for most industries even as others add workers

Jobs report time

The report is set to come out at 8:30 a.m. ET.

Dow futures

Ahead of the jobs report, futures traded for the Dow Jones Industrial Average are down.

ADP jobs report

Employers added 106,000 new private-sector jobs last month, according to payroll processing firm ADP.  Economists were expecting gains closer to 190,000.

ADP data can significantly vary from the Labor Department. For instance, in November ADP reported employers added 127,000 jobs versus the Labor Department which reported 263,000 jobs were added. But last month the gap was much smaller: ADP data found that employers added 253,000 jobs and the Labor Department reported 223,000 new jobs.

Salesforce layoffs 2023

There was some confusion this week regarding if Salesforce laid off more workers in addition to their 10% workforce cuts last month when workers announced on social media that they were laid off. But Salesforce told TechCrunch they were part of the previously announced layoffs.

Stock market post-Fed meeting

Stocks rallied on Wednesday after the Fed raised interest rates. Investors were initially rocked by the Fed's inclusion of the word "ongoing" in its statement, referring to rate hikes. But Fed Chair Powell's remarks later in the day quelled investors who celebrated the improving levels of inflation.

PayPal layoffs

Two of the biggest headline-making layoffs this week were PayPal and FedEx. PayPal announced it's laying off 2,000 workers, or 7% of its workforce. This comes as the tech industry laid off nearly 87,000 workers so far this year and almost 160,000 last year, according to data from Layoffs.Fyi.

FedEx layoffs

FedEx's layoffs were unique in that they weren't directly concentrated in the tech sector. FedEx announced on Wednesday that it would be laying off 10% of management in top positions. The company didn't specify how many workers would be impacted.

What was the December jobs report?

The December jobs report showed employers added 223,000 jobs, pushing the unemployment rate down to 3.5% from 3.7% in November. It also found that average hourly earnings rose 9 cents to $32.82, pushing down the annual increase to a still elevated 4.6% from a downwardly revised 4.8% the previous month.

What is the current unemployment rate?

The current unemployment rate is 3.5%.

Consumer Confidence Index

Consumer confidence unexpectedly fell last month as inflation continues to take a toll on Americans, according to The Conference Board's index released Tuesday. The biggest drop in consumer confidence came from households earning less than $15,000 and from households with people below 35 years old.

A separate survey by The Conference Board found that consumers are particularly anxious about the outlook for jobs in the next six months.

Employment Cost Index

On Tuesday, the Employment Cost Index was released, showing that wages grew at a slower pace than expected. That's a positive sign for bringing inflation down since price gains and wage gains tend to go hand in hand.

Dell layoffs?

Dell is part of a small group of tech companies including Apple that have avoided doing layoffs in recent months. However there are unconfirmed rumors that the compute maker could be the next tech company to announce layoffs.

Elisabeth Buchwald is a personal finance and markets correspondent for USA TODAY. You can follow her on Twitter @BuchElisabeth and sign up for our Daily Money newsletter here

This article originally appeared on USA TODAY: Jobs report Friday: Unemployment rate set to rise for January 2023


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