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Jobs report ‘ends U.S. recession fears’: Economists react to huge gain in employment

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The January jobs report on Friday showed the U.S. economy gained 517,000 jobs last month, with the unemployment rate falling to a 54-year low of 3.4% from 3.5%.

Economists polled by The Wall Street Journal had expected an addition of just 187,000  jobs and unemployment to rise to 3.6%.

See: Jobs report shows blowout 517,000 gain in U.S. employment in January

Below are some initial reactions from economists and other analysts, as U.S. stocks 

traded lower following the data on nonfarm payrolls.

• “You don’t get this kind of positive surprise if recession is imminent, so this report ends U.S. recession fears.” — Robin Brooks, chief economist at the Institute of International Finance, in a tweet

• “The term ‘game changer’ is used far too often, but the January employment report was truly a game changer. Most economists and market participants have grown increasingly confident that the labor market is on the verge of rolling over, despite a lack of hard evidence supporting such a thesis. The January employment report emphatically underscored that the labor market remains hot and the U.S. economy’s demise has been greatly exaggerated.” — Stephen Stanley, chief economist at Amherst Pierpont Securities, in a note

• “Not to be too negative here, but I really don’t believe 500k. Would bet non-trivial measurement error there. And it’s measurement error that will give the Fed too much confidence that it’s safe to keep rates contractionary for higher and longer.” — Adam Ozimek, chief economist at the Economic Innovation Group, in a tweet

• “The data show the economy is creating jobs at a rapid pace, show no sign of softening in response to over 400 basis points of tightening. Without an adjustment in the labor market, the risk is that rates will move higher than anticipated, in order to get inflation down convincingly towards the 2% target.” — Rubeela Farooqi, chief U.S. economist at High Frequency Economics, in a note


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