There is no doubt that the jobs report was a major shocker at the beginning of this month. We actually thought that we were about to slip into recession, but there is no evidence that the job market is slipping at all. Here is a basic concept—you can’t have a recession when the economy is adding millions of jobs each year. We were watching for a slowdown in job growth as a recessionary signal, but saw quite the opposite as we added over 500,000 jobs in January alone. Welcome to the economic twilight zone!

Now before we get too excited, these jobs reports are adjusted twice before they are finalized. Thus, we would not be surprised to see a downward revision in the January numbers when the next jobs report is released – especially since it will be released later in March. However, the January numbers were so strong, even a sharp revision leaves us with a great two months of job growth. Another basic concept—we can’t keep adding 500,000 jobs per month. Thus, we should expect some sort of gravitation towards the mean with this report. Even negative jobs growth for a month would still average out to a healthy start to the new year.

Let’s add one more concept. The Federal Reserve now has plenty of ammunition to keep raising rates a bit longer, as long as the economy keeps creating jobs, especially after the strong retail sales report for January. Though the real estate market has been affected negatively, there must be evidence that the rest of the economy is slowing for the Fed to hit their proverbial “pause button.” After the January surprise, we would expect that the markets will be watching February’s jobs report on March 10th very closely. Hopefully there is no more “jack” left in the box!

Dave Hershman is the top author in the mortgage industry. Dave has published seven books, as well as hundreds of articles and is the founder of the OriginationPro Marketing System and Mortgage School. Want to send this commentary and other news in a personalized format to your sphere database or on social media?  Sign up for a free trial at

Jessica Starvaggi

OriginationPro/The Hershman Group