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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. The headline is the

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Speaker 1: labor market appears to be stabilizing.

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Speaker 2: Today, the Bureau of Labor Statistics came out with one

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Speaker 2: of the year's most anticipated data dumps, a report on

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Speaker 2: hiring and firing in January and a revision of the

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Speaker 2: jobs numbers from last year. Molly Smith, a Bloomberg US

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Speaker 2: Economy editor, says that heading into today, economists' expectations had

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Speaker 2: been low.

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Speaker 1: We keep seeing these huge job cut announcements coming out

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Speaker 1: of big companies, and that seems to be making a

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Speaker 1: lot of big news and making people really anxious.

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Speaker 3: About the job market. But you get a report like

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Speaker 3: this and it's.

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Speaker 1: Like, well, there was a lot of really positive things

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Speaker 1: that happened.

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Speaker 2: The US economy added one hundred and thirty thousand jobs

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Speaker 2: last month, according to the BLS report, far more than

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Speaker 2: economists were projecting, and the unemployment rate actually dropped to

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Speaker 2: four point three percent. The takeaway the twenty twenty six

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Speaker 2: labor market could be stronger than we thought.

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Speaker 1: To see the way that the January numbers came in,

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Speaker 1: not just the beat and hiring, but also the drop

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Speaker 1: and the unemployment rate, which was not expected. Really just

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Speaker 1: showed that the labor market seems to be gaining its footing.

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Speaker 2: But Mollie says, the other takeaway is that the labor

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Speaker 2: market of twenty twenty five was weaker than originally reported.

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Speaker 1: The pace of hiring originally last year was around forty

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Speaker 1: nine thousand jobs added per month on average.

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Speaker 3: The revisions today show that was just fifteen thousand.

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Speaker 1: In the world of economics, that's of basically nothing, so

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Speaker 1: that's really not a great number.

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Speaker 2: The Federal Reserve will be weighing all these numbers as

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Speaker 2: it sets rates in the months ahead, and Mollie says

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Speaker 2: the odds are now looking better that it will stay

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Speaker 2: the course.

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Speaker 3: For the Fed.

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Speaker 1: This means that they're fairly justified in holding interest rates

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Speaker 1: right now. You know, there really is no rush to

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Speaker 1: cut interest rates when you have an economy, a job

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Speaker 1: market that seems to be studying the way that it is,

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Speaker 1: and it looked like in hindsight that the time that

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Speaker 1: the cuts that they already made were fairly well timed.

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Speaker 2: I'm Sarah Holder, and this is the big take from

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Speaker 2: Bloomberg News Today. On the show, the US labor market

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Speaker 2: shows signs of stabilizing after a really slow year. What

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Speaker 2: today's jobs numbers mean for job seekers, employers, and the

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Speaker 2: fet So let's talk about what the report revealed about

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Speaker 2: the state of the labor market right now. Those January numbers.

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Speaker 2: Where are the bright spots and where are there areas

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Speaker 2: of concern in the January jobs report?

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Speaker 3: So I guess you.

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Speaker 1: Could call this a bright spot, but also an area

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Speaker 1: of concern was that healthcare continues to dominate hiring and

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Speaker 1: actually have like the most amount of jobs added since

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Speaker 1: twenty twenty, and healthcare dominated hiring last too, really was

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Speaker 1: the majority of all job growth. Ideally, you'd want to

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Speaker 1: see more breadth of hiring and seeing this across more industries.

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Speaker 1: There were some other industries though, that did add jobs,

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Speaker 1: Manufacturing notably first time in a long time that we

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Speaker 1: saw job gains there. We saw federal government continued to

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Speaker 1: cut jobs, not really surprising. That's more or less the

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Speaker 1: industry breakdown. Looking to some other positive aspects, we also

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Speaker 1: get another survey in the jobs report, that is the

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Speaker 1: Survey of households that showed that more people voluntarily quit

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Speaker 1: their jobs, which usually is a sign that you feel

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Speaker 1: pretty confident in your ability to find a new one.

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Speaker 3: That number has been.

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Speaker 1: Pretty low for the most part. You know, people will

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Speaker 1: feel fairly insecure, don't really think this is a good time,

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Speaker 1: and you know, just up and leave.

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Speaker 2: Your job, right the big freeze, Right, that's what people

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Speaker 2: were talking about. People too afraid to leave their jobs.

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Speaker 2: That seems to be changing perhaps.

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Speaker 1: I mean, you know, another thing economists will always tell

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Speaker 1: you is only one month of data, but if sustained,

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Speaker 1: that could be a sign that maybe things are turning.

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Speaker 1: You saw far less people reported that they're working part

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Speaker 1: time for economic reasons, so that's something that had been climbing.

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Speaker 1: Also a sign, you know, of some financial distress. So

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Speaker 1: that was positive to see that fall.

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Speaker 2: And one of the other things that was on people's

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Speaker 2: mind hetting into this jobs report, where are these headline

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Speaker 2: grabbing layoffs? Amazon announced it would be cutting about sixteen

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Speaker 2: thousand jobs in January. The Washington Post, also owned by

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Speaker 2: Amazon founder Jeff Bezos, fired more than three hundred journalists.

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Speaker 2: How are those layoffs showing up in the job market

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Speaker 2: right now and are there signs of some industries contracting

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Speaker 2: or were these kind of outliers.

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Speaker 1: It's hard to reconcile the two because you see these

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Speaker 1: announcements of layoffs from these big companies you mentioned Amazon

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Speaker 1: Ups was another, and they haven't really translated into actual

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Speaker 1: layoffs in the aggregate for the most part. One thing

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Speaker 1: to note is that announcements are simply announcements. They're not

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Speaker 1: necessarily meaning that people are going to be fired right

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Speaker 1: then and there. Course at the post they unfortunately were.

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Speaker 1: But in a lot of these other companies that can

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Speaker 1: be spread out for months, you know when those actual

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Speaker 1: layoffs might happen. So even though we have had a

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Speaker 1: lot of these announcements, they haven't in the data shown

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Speaker 1: up as far as.

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Speaker 3: Actual layoffs will go. Yeah, that's that's really helpful.

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Speaker 2: So those kinds of announcements could show up in you know,

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Speaker 2: a March report or an April.

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Speaker 3: Report, or they might not show up at all.

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Speaker 1: Maybe it was an announcement that was you know, at

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Speaker 1: one point in January. Who knows, maybe things change and

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Speaker 1: they weren't actually enacted.

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Speaker 3: When you look back.

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Speaker 2: Over decades, job creation has often been tied to a

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Speaker 2: growing economy. Right, is the dynamic any different now? Given

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Speaker 2: the growth of AI, worries that AI is coming for

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Speaker 2: Americans jobs, should these numbers be viewed through a different lens?

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Speaker 2: At all.

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Speaker 1: I mean, obviously we had a great report today, but

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Speaker 1: I think in general it's absolutely fair to say that,

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Speaker 1: you know, the labor market has absolutely slowed down from

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Speaker 1: you know, those post pandemic peaks, and that we have

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Speaker 1: seen one that has been gradually cooling now for a

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Speaker 1: number of years. Today's does not change that, and it's

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Speaker 1: difficult to then reconcile that with what has been really

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Speaker 1: strong GDP numbers. That you see an economy that is

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Speaker 1: expanding at some of the fastest paces in years, yet

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Speaker 1: the labor market has been fairly slow. The reason why

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Speaker 1: you can look at those things is because the way

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Speaker 1: that GDP is actually calculated has nothing to do with

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Speaker 1: the chop market, which is also why it's a difficult

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Speaker 1: way to measure the US economy. So the economy has

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Speaker 1: been growing as fast as it is in the last

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Speaker 1: few quarters largely because of a virtual in trade policy.

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Speaker 1: You know that there had been such a huge rush

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Speaker 1: at the beginning of twenty twenty five to import as

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Speaker 1: much as companies could ahead of those expected tariffs that

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Speaker 1: did come in April, and the way that GDP is calculated,

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Speaker 1: that would then add to growth when you don't have

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Speaker 1: import activity as strong all else equal, So that's been

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Speaker 1: a lot of what's been keeping GDP so elevated, and

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Speaker 1: that's why it's hard to then look at the job

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Speaker 1: market next to that and see how the two compare well.

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Speaker 2: I also want to look closer at some of the revisions.

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Speaker 2: Annual revisions are released every January. The report we got

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Speaker 2: today showed that last year's job market was weaker than

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Speaker 2: originally reported. How much weaker and how do we know?

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Speaker 1: So this is where it gets. Also, there's just so

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Speaker 1: many layers to this. There's a few different kinds of

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Speaker 1: revisions that BLS carries out. There's one that was the

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Speaker 1: main headline revision. We call it the benchmark revision, and

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Speaker 1: that has to do with basically incorporating a more accurate,

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Speaker 1: but less timely employment series that is based on actual.

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Speaker 3: Unemployment insurance records. So that's it just has a bit

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Speaker 3: of a lag.

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Speaker 1: It's a quarterly series, so that one updated payrolls through

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Speaker 1: March of twenty twenty five, and then there's another set

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Speaker 1: of revisions that updates how BLS accounts for businesses that

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Speaker 1: own open and close. The net number between those two

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Speaker 1: that impacts the rest of twenty twenty five, as well

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Speaker 1: as you know, a model that then influenced payrolls beyond that,

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Speaker 1: and then there's also an adjustment of how BLS factors

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Speaker 1: for seasonal adjustment factors.

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Speaker 3: So all of those things combined, it's a lot going on.

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Speaker 3: I think the easiest way to think.

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Speaker 1: About this is that over the course of twenty twenty five,

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Speaker 1: the average pace of monthly job growth was now fifteen

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Speaker 1: thousand versus initially reported forty nine thousand. That essentially incorporates

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Speaker 1: all of the revisions together, and I think that's the

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Speaker 1: easiest way to think about it.

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Speaker 2: How does that stack up historically? How should we think

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Speaker 2: about that number?

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Speaker 3: How low is that? It's low?

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Speaker 1: It's like I'm trying to that's essentially like the same

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Speaker 1: as like there really was no hiring, Like that's what

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Speaker 1: we would call anemic, you know, un dynamic, barely chugging

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Speaker 1: along like there was like not really a whole lot happening.

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Speaker 2: Molly, you've walked us through all the different kinds of

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Speaker 2: revisions that we're looking at in conversation right now. Can

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Speaker 2: you remind us why these revisions happen every year? What

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Speaker 2: new information does the BLS incorporate in this data, right.

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Speaker 1: So the big one is what I had referred to

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Speaker 1: as that series that is more accurate but less timely.

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Speaker 1: It's called the Quarterly Census of Employment and Wages QCW

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Speaker 1: for sure, and that is really what a lot of

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Speaker 1: people would say is probably like the one of the

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Speaker 1: more accurate series of employment that we get. You know,

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Speaker 1: this is just how statistics work, and that if you

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Speaker 1: want to balance speed and accuracy, you have to accept

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Speaker 1: that as you get more data, that numbers are going

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Speaker 1: to be different. And that's just a trade off that

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Speaker 1: you have to be comfortable with. You want to see

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Speaker 1: the first Friday of the following month what the job's

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Speaker 1: number was. People don't have the patience to wait longer

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Speaker 1: for when more data will come in. So if you're

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Speaker 1: going to demand that kind of speed, you have to

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Speaker 1: then accept that as more data comes in in subsequent months, quarters,

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Speaker 1: even years, that the numbers are going to be revised,

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Speaker 1: and in time that does make the numbers more accurate.

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Speaker 2: I mean that speaks to something else that's significant about

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Speaker 2: this report is that the data is backward looking at

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Speaker 2: this point. So what does it mean for how we

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Speaker 2: should be viewing the labor market today? That there was,

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Speaker 2: you know, barely chugging along job growth in twenty twenty five.

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Speaker 2: What does that mean for twenty twenty six.

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Speaker 1: Well, it sets the bar a little low for where

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Speaker 1: we're starting from, that's for sure. But if you look

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Speaker 1: at say that now, the average pace of monthly job

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Speaker 1: growth in twenty twenty five was fifteen thousand compared to

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Speaker 1: today's number was one hundred and thirty thousand. Just comparing

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Speaker 1: those two, obviously there's a lot more going on that

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Speaker 1: seems like more than stabilizing to me. I mean, that's

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Speaker 1: like a pretty huge search.

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Speaker 2: But guess we'll know next year how that number is revised.

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Speaker 1: Well, even see next month how that number is revised

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Speaker 1: and the following month, and again this happens multiple times,

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Speaker 1: so we'll see how that one thirty numbers sticks.

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Speaker 3: But as it stands today, I think you can say that.

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Speaker 1: Powell did have the right idea when he spoke at

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Speaker 1: the January FED meeting that the labor market does appear

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Speaker 1: to be stabilizing. It's not just the unemployment rate that

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Speaker 1: perhaps hiring two is maybe picking.

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Speaker 3: Up a little bit as well.

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Speaker 2: So the January jobs report held good signs about the

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Speaker 2: labor market in the year ahead. But with layoffs in

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Speaker 2: the news and affordability a growing concern, how will the public, politicians,

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Speaker 2: and the Fed respond that's next. This month's sunny jobs

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Speaker 2: report doesn't address Americans' persistent concerns about inflation and affordability,

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Speaker 2: and it's not likely to diminish the sense of a

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Speaker 2: vibe session the idea that many people feel like the

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Speaker 2: economy isn't working for them, regardless of what the economic

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Speaker 2: data show. So I asked Bloomberg US econom editor Mollie

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Speaker 2: Smith how she reconciles the strong January jobs numbers with

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Speaker 2: people's current perceptions of the labor market.

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Speaker 1: This is what's been really challenging about squaring survey data

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Speaker 1: with what we call hard data, and that the surveys

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Speaker 1: are consistently far more negative than what the actual numbers show.

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Speaker 1: There is a survey that the government conducts that it's

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Speaker 1: a hypothetical. It asks if you had to pay for

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Speaker 1: an emergency four hundred dollars expense, could you do it?

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Speaker 1: And that's something that people have tracked for a long

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Speaker 1: time and how that share has like declined by and

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Speaker 1: large for a while. But there was another survey provider

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Speaker 1: who actually asked people, did you have an expense and

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Speaker 1: were you able to pay it? Now do you think

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Speaker 1: you can? But were you able to? What actually happened?

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Speaker 1: And by and large people were able to pay it.

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Speaker 1: So I think some of that just goes to show

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Speaker 1: that people maybe are more resilient than they report to

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Speaker 1: be and will find a way, you know, we did.

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Speaker 2: The other serve that I always look at is how

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Speaker 2: likely do you think it would be to find another

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Speaker 2: job if you were fired tomorrow?

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Speaker 3: Right?

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Speaker 2: And that number when it's low, feels really anxiety inducing

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Speaker 2: about the state of the economy. But as you said,

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Speaker 2: you need to kind of match that with the actual

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Speaker 2: odds of finding another job, or people's actual success rates

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Speaker 2: and finding a job.

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Speaker 1: Right, like did you actually quit your job and try

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Speaker 1: to find another one or that's just your case sitting

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Speaker 1: here employed today, if you took a guess if you

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Speaker 1: were in that situation. And I think that's where you

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Speaker 1: see a huge divergence in some of these numbers. That's

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Speaker 1: also why the economy as a whole is also still

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Speaker 1: doing really well. That we look at these sentiment surveys,

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Speaker 1: particularly for what it means for consumer spending, which you

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Speaker 1: would think based on these surveys that people aren't spending

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Speaker 1: any money at all, but that's not at all what

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Speaker 1: the actual data suggest, and that spending is still holding

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Speaker 1: up really well, as is the overall economy.

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Speaker 2: So, I mean, given the fact that how people feel

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Speaker 2: about the economy really matters politically, I'm wondering what this

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Speaker 2: report means for the Trump administration.

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Speaker 1: Well, he did just tweet a post that, you know,

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Speaker 1: great job numbers today, you know, the Golden Ages upon us,

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Speaker 1: everything looks great, which you know is a little bit

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Speaker 1: of like selective attention. I would say on his part.

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Speaker 2: He was president all last year that too, but we

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Speaker 2: had a positive aspect of the report to focus on it.

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Speaker 1: I'm not saying that he was wrong to focus on that,

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Speaker 1: but I'm saying it's a little bit selective and maybe

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Speaker 1: excluding the part of where he presided over twenty.

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Speaker 2: Twenty five, right, right, I mean in August, the Bureau

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Speaker 2: of Labor Statistics revised some of its data downward, saying

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Speaker 2: the US economy added fewer jobs than it had previously said,

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Speaker 2: and Trump called the numbers rigged. He fired the BLS commissioner.

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Speaker 2: We talked about it on the podcast, but he hasn't

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Speaker 2: had that kind.

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Speaker 3: Of reaction this time, not that I've seen so far.

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Speaker 3: I mean, the day is young. Who knows.

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Speaker 1: There's a lot of positives to take from this. But

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Speaker 1: you know, for somebody who has been very critical of

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Speaker 1: this data agency, of the revisions that they make, what

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Speaker 1: it says about the labor market as a whole, it

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Speaker 1: seems to be omitting that entire chunk.

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Speaker 3: Of the equation.

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Speaker 2: So we're also getting a report on the consumer Price Index,

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Speaker 2: which measures inflation this Friday. How do today's jobs numbers,

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Speaker 2: which are generally better than expected for January change, How

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Speaker 2: we're going to view those inflation numbers? How are you

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Speaker 2: going to put those two numbers in conversation.

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Speaker 1: Well, something else that we saw in this job's report

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Speaker 1: today that we didn't get into was wage growth, which

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Speaker 1: was a bit stronger than expected. So you know, usually

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Speaker 1: that is the real engine of course, of like consumer spending,

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Speaker 1: of like what your pay is, and to see then

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Speaker 1: how that might factor into demand for goods and services

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Speaker 1: and how that could infect their prices in January.

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Speaker 3: I think that would be the correlation we would look for.

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Speaker 2: And I mean a body that will be looking very

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Speaker 2: closely at the CPI data and the jobs data.

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Speaker 3: Is the Federal Reserve.

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Speaker 2: Of course, what does this job's report mean for the

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Speaker 2: chances that they cut rates next meeting?

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Speaker 1: Oh, that was already about zero to say, like a

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Speaker 1: cut form March. That wasn't going to happen coming into

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Speaker 1: this report. The expectation was more around June for the

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Speaker 1: cut tappen at that meeting, But after today, basically that

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Speaker 1: shows that again that like what Pale has been saying

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Speaker 1: that like policy is well positioned right now, we feel

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Speaker 1: like we're in a good place, we can adjust if needed,

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Speaker 1: and that there is no urgency to cut.

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Speaker 3: All of that very much validated today.

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Speaker 1: You see that the way Trump reacted to the numbers,

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Speaker 1: saying that you know, we had such great job numbers,

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Speaker 1: as you know, we should be playing among the lowest

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Speaker 1: interest rates in the world. It's a little bit more

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Speaker 1: complicated than that that. You know, if you're seeing the

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Speaker 1: job market grow that the way it is, you wouldn't

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Speaker 1: think you would need lower interest rates to support it.

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Speaker 1: And that's how the FED is looking at this.

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Speaker 2: In May, we could see a new FED chair. Kevin

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Speaker 2: worsh is Trump's pick for the job. Has worsh responded

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Speaker 2: to these numbers at all. How might this change his thinking?

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Speaker 3: I think it's going to make things very complicated for him.

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Speaker 3: You know that.

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Speaker 1: Again, there's a lot of time between now and May.

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Speaker 1: He also has to be confirmed first. But basically, he

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Speaker 1: took this job with the understanding that the president wants

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Speaker 1: him to cut interest rates. Obviously it's not just his decision.

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Speaker 1: There's a whole body of policy makers. But certainly the

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Speaker 1: chair tries to rally a consensus and speaks for the

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Speaker 1: entire Central Bank. So Trump did say like that the

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Speaker 1: understanding of like warshaking this job is that he's going

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Speaker 1: to cut rates, and of course Warsh knows that too.

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Speaker 1: The whole country knows that. The whole world knows that

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Speaker 1: this is what Trump wants. The numbers make that again,

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Speaker 1: as we said here today, a bit more complicated. This

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Speaker 1: doesn't look like an economy right now that is calling

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Speaker 1: for any immediate cut to interest rates.

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Speaker 2: This is the Big Take from Bloomberg News. I'm Sarah Holder.

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Speaker 2: To get more from the Big Take and unlimited access

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Speaker 2: to all of Bloomberg dot com, subscribe today at Bloomberg

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Speaker 2: dot Com Slash Podcast Offer. Thanks for listening. We'll be

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Speaker 2: back tomorrow,