Read the highlights of this week’s commentary from Helios:
- US employers added 143,000 jobs in January and the unemployment rate edged down to 4.0% (from 4.1% in December). Average hourly earnings rose 0.5% in January and were up about 4.1% over the past year, indicating that wage growth remains firm and above the pace consistent with the Fed’s 2% inflation goal.
- In January, the ISM Manufacturing PMI surged to 50.9 from December’s 49.2, the highest reading since September 2022, signaling a return to expansion. Notably, the Employment Index climbed back above 50, marking a return to hiring growth in the sector. At the same time, manufacturers reported higher input costs, suggesting inflationary pressure from increasing raw material prices.
- Consumer sentiment declined in early February, falling to 67.8 from 71.1 in January, as inflation concerns intensified, particularly among Democrats. Year-ahead inflation expectations jumped from 3.3% to 4.3%—the highest since late 2023. Tariff concerns grew, with one-third of consumers mentioning them, and views on inflation remain sharply divided along party lines, with Republicans expecting inflation to ease while Democrats anticipate higher prices due to tariffs.
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