The labor market update that investors have been waiting for isn’t due until Wednesday morning, but officials at the White House have already started to temper expectations.
National Economic Council Director Kevin Hassett told a financial news outlet on Monday that “you should expect slightly smaller job numbers” and that a dip would not necessarily signal a broader problem. He blamed a combination of a “productivity boom” and a “pretty big decline in the labor force because of illegals leaving the country” for the lower figures.
President Trump also weighed in during a Fox Business interview, saying that he had cut hundreds of thousands of jobs but still saw good employment numbers. He added that if government payrolls hadn’t been trimmed, the country could have “the greatest employment numbers you’ve ever seen.”
The January jobs report, delayed five days by a partial government shutdown, will be released Wednesday at 8:30 a.m. ET. Economists surveyed by a major financial institution expect about 70,000 nonfarm payroll jobs were created last month, though estimates range from 135,000 added to a loss of 10,000. The unemployment rate is projected to stay steady at 4.4%.
Private‑sector hiring was also weak, with ADP reporting only 22,000 new jobs in January—about half what economists had anticipated. The Bureau of Labor Statistics’ recent Job Openings and Labor Turnover Survey showed openings shrinking to the lowest level since 2020, and a global outplacement firm recorded the highest number of layoffs since 2009.
Amid these mixed signals, White House officials have offered a variety of explanations. They point to immigration trends, advances in productivity—especially from artificial intelligence—and the impact of government spending cuts.
Trade adviser Peter Navarro highlighted the immigration angle during a Fox Business appearance, arguing that “we have to revise our expectations down significantly for what a monthly job number should look like.” He suggested that 50,000 jobs would be enough to keep pace with population growth, noting that the removal of millions of undocumented workers from the labor market would force Wall Street to adjust.
Hassett acknowledged the ongoing debate over how rising productivity affects job creation, saying it remains an open question whether “job creation lags” as productivity increases. He didn’t offer a firm prediction, but indicated that a slowdown could still occur.
With the labor market’s future uncertain, the White House is already preparing for the political fallout and signaling that the market may need to adjust its expectations for the next set of job numbers.
