The latest numbers from the BEA include an upward revision for GDP and downward revision for inflation.

This is the first payrolls report that fully reflects Trump’s second term, but because it landed before most of the administration’s firings, March unemployment data will look “a lot uglier.”

“The concern with higher inflation expectations is that it can be self-fulfilling—what people and businesses expect to happen, often does.”

Economists also see a 25% chance of recession in the next 12 months—up from January and the first increase in two years, but well below the 65% chance estimated in the first half of 2023.

Unemployment numbers are likely to rise soon. The lost positions will primarily be well-paid roles held by highly educated workers, which will spill over to consumer-facing industries and housing, pushing Washington, D.C., into a mild recession by the summer.

Inflation tends to come in higher in January. Still, today’s BLS report indicates that inflation progress has stalled and may be in danger of being reversed.

While a decline in vacancies and easing wage growth suggest some moderation is under way, employers are still hiring and layoffs remain subdued.

The core CPI increased 0.3% for a fourth straight month, solidifying bets that the Fed will lower interest rates next week.