Latest Jobs Report could Come with a Shock

A prominent Wall Street strategist sees the potential for a surprise in this week’s January jobs report.

Federal Reserve Chair Jerome Powell has previously suggested an overstatement by as much as 60,000 jobs. (Photo: U.S. Department of Labor Facebook) 

Steve Englander, Standard Chartered’s head of global G10 FX research and North American macro strategy, says it’s possible the report comes in 10,000 jobs below the expected 65,000, Liz Moyer reported for Barron’s Daily.

January’s report will include annual benchmark revisions, along with a modified model designed to reduce overstatements of job growth, he said. The changes could lead to a significant downside surprise.

Data dating back to April 2025 will be revised using the same model.

Englander said the consensus estimate of 65,000 jobs added last month reflects a moderate rebound in private hiring and a persistent overstatement from the so-called Birth-Death model, which is being revised.

Federal Reserve Chair Jerome Powell has previously suggested overstatement by as much as 60,000 jobs.

If those overstatements are corrected, private payrolls may have contracted by 30,000 in the fourth quarter instead of growing by 30,000, Englander said.

Overall job growth would have averaged a decline of 83,000, reflecting cuts by the Department of Government Efficiency.

For full-year 2025, nonfarm payroll growth may be revised down from the current estimate of 61,000 to zero or lower, he said. Average growth for the final nine months of 2024 could be revised down to 60,000 from 130,000, based on preliminary revision signals.