Wells Fargo: Jan Jobs Report Will Be Music To FOMC's Ears

Wells Fargo saw signs in January's "rosy" employment report that the the labor market "is starting to thaw", with the participation rate setting a fresh pandemic era high, "even in the face of the headwinds" generated by Omicron.

• While some of the strong 709k net revisions to the prior 2 months can be attributed to benchmark revisions, "the labor market is starting the year on a much better footing than expected."
• "Blunting the impact from Omicron were strong seasonal factors", as in this case, employers let go fewer workers than usual (leading to SA gains in retail, public education, transportation etc), while broader gains included leisure and hospitality as well.
• This report is "likely music to the ears of FOMC officials", providing more evidence that the US economy is getting better at dealing with the pandemic, while surging wages/higher participation will assure doves that the recent Fed hawkish pivot was the correct call.