Chief Economist Scott Brown discusses the latest market data.

With the previous week’s short-squeeze headlines behind us, investors remained optimistic about a fiscal support package, which passed the Senate by a vote of 51-50, with Vice President Harris breaking the tie.

Nonfarm payrolls rose by 49,000 in the initial estimate for January, while figures for November and December were revised lower. Prior to seasonal adjustment, the economy lost 2.7 million jobs, in line with the start of the last few years. The unemployment rate fell to 6.3% (from 6.7% in December, but up from 3.5% a year ago), with the decline concentrated in teenagers, young adults and older workers. The unemployment rate for prime-age workers (ages 25-54) held steady at 5.8%. The January ISM surveys showed continued strength in new orders, but the pandemic contributed to supply chain delays and input cost pressures (which should be transitory). Unit motor vehicle sales improved in January.

Next week, the economic calendar thins out, with the Consumer Price Index being the only major data release. An increase in gasoline prices is expected to drive the CPI higher in January, while restraint on rents should keep core inflation on a moderate trend. Fed Chair Powell will speak to the Economic Club of New York on Wednesday. The topic is the current state of the job market.