Location Strategy Chartbook 02.08.25

The January payroll numbers will be hard to parse because of the wildfires in Los Angeles and cold weather in other parts of the country. And annual revisions that are often overlooked will be scrutinized for clues on whether the job market was or wasn’t as resilient as initially reported.

US job growth moderated in January after annual revisions from the government revealed less vigor in the labor market last year than previously thought.

Nonfarm payrolls increased by 143,000 last month after a revised 307,000 gain in December, a Bureau of Labor Statistics report showed Friday.

The BLS said the wildfires in Los Angeles, as well as severe winter weather in other parts of the country, had “no discernible effect” on employment in the month.

The government’s once-a-year benchmark revisions now show job growth averaged 166,000 a month last year, a slowdown from the initially reported 186,000 pace. T

he BLS uses records from the unemployment insurance tax system, and also adjusts for the openings and closings of businesses, to revise its previously published payrolls counts.

The change in January employment and updated payrolls figures back to early 2023 show a moderating yet healthy labor market that continues to fuel the economy without contributing to inflationary pressures. It also helps explain why Federal Reserve policymakers have signaled they aren’t in a hurry to lower borrowing costs further after three interest-rate cuts last year. Officials are also contending with inflation that’s dissipating only gradually and uncertainty around new policies from President Donald Trump. While Chair Jerome Powell has most recently described the job market as “pretty stable,” he and his colleagues have repeatedly said they wouldn’t like to see it cool any further.

WSJ: The U.S. likely added 169,000 jobs in January, down from 256,000 new positions in December, according to economists polled by The Wall Street Journal. They figure the unemployment rate held steady at 4.1%.’

WSJ: It took nearly 50 years, but half of private-sector workers are saving in 401(k)s for the first time.

In an interview with The Wall Street Journal, Turner said HUD would work with the Treasury Department and Congress on privatization of the mortgage-finance firms and that he would act as a “quarterback” of sorts in the process. The efforts to free the firms from government control would also involve the Federal Housing Finance Agency, which oversees Fannie and Freddie.

Separately, advisers, lawmakers and bankers have passed around proposals detailing how privatization could support the Department of Government Efficiency, the cost-cutting effort led by Elon Musk, according to people familiar with the discussions. Other proposals have discussed using proceeds from any transaction to fund the tax reforms President Trump has promised.

The focus instead is the bond market, as Trump’s Treasury Secretary, Scott Bessent, made crystal-clear this week, and in particular the 10-year Treasury yield, which serves as a benchmark for the things that Trump and his team care most about.

“The 10-year, I believe, is the important price to focus on,” Bessent said in an interview with Bloomberg. That benchmark is about “mortgages, it’s long-term capital formation,” he said.

To underscore how important home-loan rates are, Bessent, when asked about any reforms to Fannie Mae and Freddie Mac (two giant housing-finance companies the government seized direct control of during the great financial crisis), said that any action “is going to hinge on the effect of long-term mortgage rates.”

Financial markets were buffeted this week amid trade tensions between the US and its largest trade partners. However, sticky inflation was seen as a bigger risk to the US exceptionalism theme than tariffs, according to the latest Marquee QuickPoll, which surveyed nearly 800 respondents in early February (the poll closed on February 5)

US economic data (43%) and geopolitics (42%) are the two biggest risks on investors' minds this month. "The focus on geopolitics reached levels not seen since April 2022 - the onset of the Russia-Ukraine war - as markets navigate policy-driven volatility," says Goldman Sachs' Oscar Ostlund, global head of Content Strategy, Market Analytics, and Data Science.

Investors are particularly focused on sticky inflation, singling it out as the biggest threat to the US exceptionalism theme. And some may be concerned that tariffs could keep prices elevated, according to the results. Notably, only 13% picked AI-related concerns as a risk here.

Home insurance is increasingly not affordable in natural disaster areas and is impacting Sellers and Buyers. The price shock is notable in Florida with condos getting hit the worse / master insurance policies being dropped. Likewise multifamily is feeling the same pain.

Statista: In 2024, 34.59% of all households in the United States were two person households. In 1970, this figure was at 28.92%. Families are typically more nuclear, whereas in the past, multigenerational households were more common. Furthermore, fertility rates have also decreased, meaning that women do not have as many children as they used to.

Single mother households are usually the most common households with children under 18 years old found in the United States. As of 2021, the District of Columbia and North Dakota had the highest share of single-person households in the United States.

Of all the states, Utah was reported to have the largest average household size. This predominately Mormon state has about three million inhabitants. Utah has a relatively young population, due to Mormons typically marrying and starting large families younger than those in other states.

Kronberg Urbanist + Architects: Home sizes are falling

Texas, which has an economy bigger than Italy’s but with a much smaller population, has been propelled in recent years in part by a boom in tech and energy construction, according to the Federal Reserve Bank of Dallas.

While a Republican-run state, analysis by Dallas Fed economists Jesse Thompson and Prithvi Kalkunte showed that a trio of programs enacted by former President Joe Biden, a Democrat, “have supercharged construction of technology and energy-transition-related projects” in Texas. The trio includes the Inflation Reduction Act, a bipartisan infrastructure bill and the Chips and Science Act.

Pre-pandemic, Texas accounted for a negligible share of semiconductor plant construction contracts in the US, but that soared to almost 24% — more than $15 billion — in 2023, the duo found. “Since mid-2022, after many of the recent federal industrial policy programs were enacted, Texas is responsible for more than $289 billion, amounting to 16.5 percent of the value of total US nonresidential and nonbuilding construction contracts.”