Is the US rebounding?

 January labour market data were much stronger than I and the markets expected.   After a steady deceleration, the monthly rise in non-agricultural payrolls jumped from 200 in December to 517 in January.  Now, economic time series fluctuate from month to month, even a relatively "smooth" series like payrolls.  One way to deal with these random fluctuations, is to look at changes over, say, a three-month span instead of a one-month period.  Another is to fit some kind of moving average to the underlying data.  A third is to remove "spikes" by applying an extreme-adjustment algorithm.  I use all three of these techniques in the chart below.

The 'whole economy' ISM index has been extreme-adjusted

Yes, payrolls jumped in January.  But the trend remains down.   But what about the chart below?  This shows the change in the unemployment rate, inverted (because unemployment goes down when the economy is strong and up when it slows).  As you can see, the unemployment rate is falling faster than is consistent with the state of the economy and of payrolls.   That's prolly because 3.5 million people have left the labour force because of Covid.  A grim statistic.  

I still believe that the economy will continue to slow over the course of this year, despite the jump in payrolls and the plunge in unemployment.  But these data will make the Fed more cautious about ending the current sequence of rising rates.   Covid and Russia's attack on Ukraine have seriously warped economies, making Central Banks' jobs much harder.  CBs' run the risk of overtightening because of data distortions, worsening the global economic downturns.