Episode summary
US Adds 130,000 Jobs in January, Unemployment Falls
Bloomberg Surveillance
· · Guests: Claudia Sahm, Heather Long, Laura Ullrich
Summary
The guest says the January jobs report is best understood in the context of major downward revisions, not just the headline gain of 130,000 jobs. She argues the benchmark and birth-death adjustments show the labor market was weaker than initially reported in 2025, but says the latest data still point to some stabilization because payrolls rose and unemployment ticked down to 4.3%.
She says the Federal Reserve was already aware of the revisions, so the report is not a surprise for policymakers. In her view, the bigger message is that labor supply has shifted abruptly, especially because immigration dynamics changed quickly, which makes payroll data look scarier than the unemployment rate. She says wage growth is slowing and unemployment is still drifting up, so the market is not fully healthy.
The guest also emphasizes that the labor market is especially difficult for people new to work. She says the cycle since the pandemic has been unusually volatile and may be an example of a soft landing: unemployment can rise gradually without a recession. Even so, she says avoiding recession is not the same as being “good enough.”
Key takeaways
- The guest says the 130,000 January payroll gain matters less than the large downward revisions showing 2025 hiring was much weaker than first reported.
- She says the Fed already knew about the benchmark revision, so the report should not change policy expectations much.
- The guest says immigration shifts have distorted the payroll picture, making the unemployment rate a better read on underlying labor conditions.
- She says wage growth is slowing and the labor market remains tough, especially for people entering it for the first time.
- The guest argues the current cycle could resemble a soft landing, with unemployment rising gradually without a recession.
Notable quotes
“When I say the benchmark revision that goes to last March was almost 900,000 down”
“So now we got the best possible outcome today. We knew these revisions were coming”
“these are huge revisions. So I'm sitting in the back of the class at Michigan hiding you and the smart people are up front”
“the immigration dynamics and we we've seen a big swing. A lot more immigration than had been typical”
“Maybe that gradual rise in unemployment rate without a recession. Maybe that's what a soft landing actually looks like”
How the episode opens
When I say the benchmark revision that goes to last March was almost 900,000 down. There are other revisions from the birth death model that come in the months after that. By December of last year, the downward revision was over a million jobs.
Yeah. So now we got the best possible outcome today. We knew these revisions were coming and they're going to talk about what's behind them.
But to see the most recent readings, we've got some lift in the payrolls in January is just one month. But we got some lift and and the unemployment rate ticked down. So, like we want to see a labor market that's stabilizing and coming out of this.
But like, these are huge revisions. So I'm sitting in the back of the class at Michigan hiding you and the smart people are up front. Okay.
My fancy math is 1 million jobs loss for whatever. Claudius, Diane Swonk Reason divided by 12 is 83,333 jobs evaporated every 30 days out of our belief are fabric of the American labor economy. Do I have that right?
So the revisions actually go back further. The first month it will be revised down because the benchmark was April of 2024. Right.
They take the annual benchmark revision as is wedged in over the prior 12 months. So so where that million down, that's happening over a span of time. But if you look at the monthly changes last year, the new estimates, there's a lot of red.
I mean, there's a lot of months where we were dipping, you know, into the now, you know, destroying jobs. So these are big numbers. It is spread out over a period of time.
But there's something here for us to understand about what exactly is happening with job creation and how comforted should we be by the latest numbers?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- january jobs report
- unemployment rate
- fed interest rates
- labor market stabilization
- job openings and hiring slowdown
Companies and tickers mentioned
- AMZN
- UPS
- Amazon.com
- United Parcel Service
Watch the episode
Watch “US Adds 130,000 Jobs in January, Unemployment Falls” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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