Strong Economy… Really? – Are strong jobs numbers misleading?
Happy Friday, Brian Manning with the weekly update. Let’s get right to it.
So, Monday this week, we had Fed Governor Waller speaking. At the last meeting, Governor Waller actually wanted to cut rates by 40%. He was one of the few that dissented, even though rates didn’t get cut. He really feels like the January jobs report is just inaccurate. We’ve talked about this in the past; we’ve actually been saying for quite a while that we just don’t believe the jobs reports that have been coming out. I think there were like 150,000 jobs that they said were created in January, and he thinks it’s inaccurate and going to be revised. He pointed out that throughout the months in 2025, on average, there were only maybe 15,000 jobs created. So, he thinks there are going to be some revisions there.
He also feels like inflation is in line with the target of 2%. When you really pull out the tariffs and the impact they’re having on costs, inflation is really in check. It is so good to see a Fed Governor out there speaking in a way that—I would say—we agree with.
Tuesday and Wednesday were quiet; there was not a lot to talk about there.
Thursday this week, we got some feedback from Apartment List. This is looking at new rents. Apartment List says new rents are down 1.5% on a year-over-year basis. This was the softest number since 2020.
Then today, Friday, we had what is called the Business Employment Dynamics Report. This is looking at Q2 and talking about employment. Now, the BLS originally came out and said that in Q2, there were 74,000 jobs created. However, this report comes out as a revision and says, “Oh, no. I’m so sorry. There were actually 400,000 job losses that took place at that time.”
We’ve been talking about this. The problem is that when you get these really strong job reports—even if they’re inaccurate—it moves the markets, and interest rates react to that. Unfortunately, interest rates increase. Now we are starting to get these revisions coming in, showing us that the job market in 2025 was just not as strong as all the original reports said.
I really think that we’re starting to see markets move fairly favorably now. It feels like markets are realizing that employment is not as strong as the reports said in 2025. Also, perhaps they’re seeing that inflation is coming into check, because we’ve seen mortgage rates move nicely lower over the last week or so.
Realtors, we have a great new luncheon coming up! The first one is in Denver at Capital Grill. We’d love to have you there, so please RSVP. It’s actually almost sold out already. If you can make it, make sure you RSVP as fast as you can.
Happy Friday! I’m around if you have any questions, so give me a call. I’m available seven days a week, 8 to 8. Hope you have a great day today.
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