January jobs report surpasses expectations, unemployment rate falls to lowest level since 1969

Yahoo Finance Live anchors recap January jobs report data.

Video Transcript


BRIAN SOZZI: All right, here are three things you need to know at, right-- well, right now. The January jobs report blows past expectations with 517,000 workers added and hugely complicating the picture for the Federal Reserve. Is this a big shock or just a noisy number? We'll discuss.

JULIE HYMAN: And Apple earnings coming up sour, missing expectations on the top and bottom lines. We're gonna break down the number for the iPhone maker shortly.

BRAD SMITH: And Amazon earnings are thing three as they've been a bit cloudy, as online store sales came up short of Wall Street estimates. So what does that mean for the consumer? We're gonna dive into that and much more.

But first, let's get into the first thing here this morning. The first big thing that we have been keeping our eyes on here and it has been the jobs report, as well here. And, Julie, as we're continuing to really kind of parse through some of the numbers here, I mean, the growth that we had seen, far, far surpassing what the expectation was coming into this.

JULIE HYMAN: Yeah, far-- we were just looking at these charts here. If we look at the three day, as our Jared Blikre was doing earlier, that shows exactly what happened from the Fed, meaning the other day, and then the trajectory until now. So basically, we have now come full circle since then.

If you look at the futures, as well, not quite the same magnitude, right? But directionally going back in that direction. So that's effectively what we're seeing here.

If we look at some of the heatmaps and look at the NASDAQ 100 here, which is where we are. The numbers on the bottom are mostly in the red. And that's where we find a lot of the tech stocks this morning, after that number and also after, obviously, a lot of numbers from the individual companies, as well, Sozz.

BRIAN SOZZI: All right, let's tick through these things. Thing number one you need to know today, jobs jump coming in well above the 188,000 expected. And unemployment rate falling to 3.4%. Guys, let's try and dive into these numbers. A real blow out report here.

I really like the analysis moments ago from Joe Brusuelas and Lauren Goodwin, they provided to us. But a big report certainly pushing back, I think, on some of this hope-- or hoping in the market that we might get that Fed pivot and get it very soon. This report suggests, maybe that's not going to happen.

BRAD SMITH: You know, one of the other things that was mentioned by Joe when we had him on set here was that this is the lowest unemployment rate reading, when taken out to the 1/1000th of the decimal point that we've seen in our lives here. At least, anybody that was here on this set. So that is significant.

However, it's also significant from the fact that Fed Chair Jay Powell waking up seeing this number, perhaps looks at it and says, OK, well, looks like we can do a little bit more work on this. And that's certainly rattling the markets, as Julie was just breaking down at the touch screen a moment ago.

JULIE HYMAN: Yeah, and so, you know, we were just talking to Joe Brusuelas and Lauren Goodwin a little bit ago, and their reaction to these numbers. And Joe's message was really that, while this is a big number, it's not as big as it appears to be.

And I've seen some other commentary on Twitter and the like, as well, including from economist Justin Wolfers, that if you look at the hourly earnings number, yes, it was up 4.4% year-over-year. But if you look at the month-to-month change, it was 0.3%, bang in line with estimates.

And so that's really the number that the Fed is keying in on. If, in fact, it is trying to attack inflation, maybe doesn't change the trajectory as much as the market seems to think it is today. So I think maybe it's a little bit more nuanced than that big 517 is on the surface.

BRIAN SOZZI: Yeah, leisure and hospitality really sticking out. Creating more-- well, about, what, 128,000 jobs in the month. That is a huge gain. But maybe not surprising, Brad, we got some really good earnings results from these airlines. And all of the commentary that we heard on forward bookings into the spring was pretty strong. So clearly, that sector is not preparing for an economic downturn.

BRAD SMITH: Yeah, the travel leisure space has been talking about a golden age of travel since October, at this point. And for some of them, signaling that demand that was holding strong, even since the summer of last year. So where does that put us now as it relates to the employment situation here?

If you're gonna continue to see leisure and hospitality try to rebound as best as possible. And it is doing so. Largely has been outpacing because it's-- in the job gains at least, largely because it's had the farthest way to come back. Then where does it get into some of the other elements of the economy?

In those consumer discretionary sectors, that's one element that I would continue to watch out for here. When you have companies that are-- they've got these large massive storefronts and footprints, and they're saying to themselves, OK, do we really need to hire more workers right now? Or can we just reinvent the retail experience? And especially in some of those categories that aren't performing well.

Why would they be compelled to open up more jobs? And, at the end of the day, does that mean that for some of the employees that are there, perhaps they'll get paid more. But that doesn't mean that they're going to have the lesser load in their workday, as well.

BRIAN SOZZI: I really like what Joe Brusuelas said about why these tech layoffs are not showing up in these jobs numbers. The headlines on jobs hasn't been good, notably from tech, but also increasingly manufacturing. He said, they're still getting hired. They may not be getting hired at the same rate but this pool of employees, a lot of smaller companies have not had access to them at lower wages or had access to them at all. So maybe they're getting hired right away.

JULIE HYMAN: If worse comes to worse and your coder and you get laid off, you can always go work on a cruise ship.


JULIE HYMAN: You know they're looking for people.

BRIAN SOZZI: Or create your own business.

JULIE HYMAN: Sure, exactly.

BRAD SMITH: I don't do cruise ships so I'd find it hard to work. but, hey, more power to you.

JULIE HYMAN: You can work at a hotel. You don't have-- it doesn't have to be floating.

BRAD SMITH: Well, that's true. That's true. There's a lot of good hotel experiences--

BRIAN SOZZI: Be sure to take Spirit on your next cruise.

BRAD SMITH: What's that?

BRIAN SOZZI: Take Spirit.

BRAD SMITH: Oh, no, never.