Omicron. Revisions. Big seasonal factors. Friday’s U.S. jobs report for January is poised to be a doozy.

Nonfarm payrolls forecasts — analysts’ guesses at how many American jobs were lost or gained — range from a 400,000 monthly decline in January to a 250,000 advance, and the confluence of crosscurrents will likely make the report a bit baffling. So much so that White House officials have already warned the report could be confusing or even misleading.

“This is going to be a particularly tricky one,” said Nick Bunker, director of economic research at Indeed. “It is reflective of a really disruptive period during this pandemic.”

A report Wednesday showed U.S. companies shed 301,000 employees from payrolls in January, the most since April 2020, as the coronavirus omicron variant registered a swift blow to the nation’s labor market, according to ADP Research Institute.

Here’s a guide of what to look for:


Average hourly earnings are expected to rise 0.5% from a month earlier and 5.2% from a year ago.

While wage growth has been exceptionally strong in recent months, the figure is likely to be artificially high. The surge in COVID-19 cases — and related absences — likely disproportionately affected high-contact, lower-paid service jobs. If those wages aren’t included in the calculation, higher-wage jobs will make up a greater share of earners and inflate the wage data.


Wage growth also still lags the increase in consumer prices, which have eroded Americans’ paychecks.


The monthly jobs report is a midmonth snapshot of the labor market, and from a COVID perspective, mid-January was ugly. The omicron variant drove coronavirus infections to record highs. Some businesses temporarily closed their doors and many workers called in sick.

“The wheels of the entire hiring process slowed down in January,” said Sarah House, senior economist at Wells Fargo & Co.

The highly infectious variant is guaranteed to have some impact on Friday’s numbers.

Nearly 8.8 million Americans said they were not working because they were sick or caring for someone with coronavirus symptoms, according to a Census Bureau survey conducted Dec. 29 to Jan. 10. And applications for unemployment benefits in the week ended Jan. 15 jumped by the most in nearly 10 months.

Better future

The good news is most economists expect the January report to represent more of a blip than a meaningful shift.


Federal Reserve Chair Jerome Powell described the labor market as “strong” last week and said the central bank expects the omicron-related softness in the economy to be “temporary.” Aneta Markowska, chief financial economist at Jefferies, agrees.

“I don’t see any reason why we shouldn’t see a good snapback in the pace of hiring,” Markowska said. “We’re not going to go back to a million-type job growth, but I think we could go back to 500,000-per-month-type job growth for a while.”

That said, sustaining that level could be challenging due to a low unemployment rate and a smaller workforce than before the pandemic.

“We’re also at a point in the cycle where you expect job growth to slow,” said Brett Ryan, senior U.S. economist at Deutsche Bank. “There’s just not that labor slack left.”

Seasonal adjustment

Normally most seasonal hires depart in January, and the Bureau of Labor Statistics adjusts for the big swings. For example, in January of last year, nonfarm payrolls increased 233,000 from a month earlier when adjusted for seasonal factors. However, on an unadjusted basis, payrolls fell by more than 2.6 million.

But this time, employers could have decided to hold on to more workers in a tight labor market, especially in sectors such as retail and warehousing.