Are We Past “Strong” Jobs Data Now? | S3 E119 | 02-05-26

Markets reacted negatively to today’s economic data — and the labor market was at the center of the concern.

In this episode of Markets with Megan, Megan Horneman breaks down the latest U.S. labor market data, including the JOLTS report, Challenger job cuts, and weekly jobless claims, and explains why markets didn’t like what they saw.

Job openings fell to 6.5 million, the lowest level since September 2020, while the number of unemployed Americans climbed to 7.5 million. For the first time since the post-pandemic recovery began, there are now more unemployed workers than available job openings — a key signal that labor market tightness has fully reversed.

Megan also discusses why the quits rate holding at 2% may help ease wage pressures, even as broader labor conditions soften. Meanwhile, the Challenger Gray & Christmas report showed January layoffs surged 118% year-over-year, marking the worst January for job cuts since 2009. Although a large portion of layoffs came from a handful of major companies, hiring intentions fell to their lowest level on record.

Weekly jobless claims also jumped to an eight-week high, adding to investor unease — though severe weather disruptions may have played a role.

📉 With weakening labor data, rising layoffs, and declining risk assets like Bitcoin and precious metals, Megan explains what this shift in employment trends could mean for markets, wages, inflation, and the upcoming jobs report.

🎧 Subscribe to Markets with Megan for daily insights on economic data, Federal Reserve policy, and market implications.

🔔 Like, subscribe, and hit the notification bell so you never miss an update.

🌐 Full podcast archive:
https://marketswithmegan.fm

#MarketsWithMegan #LaborMarket #JobsReport #JOLTS #JoblessClaims #Layoffs #EconomicData #RecessionWatch #FedPolicy #MarketVolatility #Inflation #Investing #stockmarket 

https://youtu.be/pGbDBibSG1s

Disclaimer:  material was prepared by Verdence Capital Advisors, LLC (“VCA”). VCA believes the information and data in this document were obtained from sources considered reliable and correct and cannot guarantee either their accuracy or completeness. VCA has not independently verified third-party sourced information and data. Any projections, outlooks 
or assumptions should not be construed to be indicative of the actual events which will occur. These projections, market outlooks or estimates are subject to change without notice. This material is being provided for informational purposes only and is not intended to provide, and should not be relied upon for, investment, accounting, legal, or tax advice. Past performance is not a guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance 
that the future performance of any specific investment, investment strategy, or product or anynon-investment related content, made reference to directly or indirectly in these materials will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. You should not assume that any 
discussion or information contained in this report serves as the receipt of, or as a substitute for, personalized investment advice from VCA. Due to various factors, including changing market conditions and/or applicable laws, the c...

Transcript

Market Reaction To Labor Data

Megan Horneman 0:00

The markets don't like the economic data that we got today, specifically surrounding the labor market. It's Thursday, February the 5th, and this is Markets with Megan. If you like this podcast, subscribe. You can hit the alarm bell, share it with your friends, family, or colleagues. But we're here today to talk about the economic data that was released this morning and what it showed us on the progression we're seeing in the labor market. And we knew coming into this year the labor market was weak, but what we what we're seeing is that the data may be may be a precursor to what we see next week when we get the jobs report. And it may not be as favorable as we saw the last time with the rate uh ticking lower. But let's dig into the data. If you look at the Jolts report that we got today, this was for the month of December. So this is ending the year last year. We saw that there were six and a half million job openings. That was the weakest amount of job openings that we've seen since September of 2020. So really coming out of the depths of the pandemic. There are at this time in the month of December, there were 7.5 million unemployed Americans. So when you look at that difference, this is the widest dispersion or the most amount of people that are unemployed compared to job openings that we've seen since March of 2021. So all of that COVID structural damage from the labor market has reversed itself now. And now we are seeing more people unemployed than job postings. But what we are seeing also is that people are holding on to their jobs longer. The quits rate or those that are leaving their job voluntarily without having another job, that skyrocketed in the aftermath of the pandemic as people decided to whether it's leave the labor force or quit their job in search of a new one because there were so many good job prospects. But what we're seeing is that quits rate stayed unchanged at 2%. The historical average is 1.9. So we're getting back into some equilibrium here. These things should help ease some of the wage pressures that we had in the years after the pandemic. Now, some of the other things that we got information on today was the Challenger Gray and Christmas report. This is a report that shows the job layoffs that were announced publicly disclosed for the month. And what we saw in the month of January that it was the worst January for layoffs since 2009. And that's a bit concerning because that was the depths of the great financial crisis. Job layoffs rose one in a hundred 118% on a year-over-year basis. The hiring intentions that are also reported in this report were also the worst on record. Now, looking at those layoffs, though, about half of them were tied to three companies. That was Amazon, UPS, and Dow. There were some other areas, Nike, for example, uh Peloton, they also announced some layoffs. But again, a lot of that was higher, was had to do with those three companies. Now we also received the weekly jobless claims report, and that was for the week ending January 31st. And we saw that they jumped to an eight-week high. Now, again, concerning, especially since it piled on the top of two other disappointing jobs reports. But let's also keep in mind that there is the report of a lot of disruptions because of weather that we have had some very extreme weather conditions across the United States, which may have impacted this report. That's all we have today. The markets definitely don't like these economic data. There's some other things going on in the market. We're seeing a sell-off again in Bitcoin, in the precious metals. This is impacting overall risk sentiment as well as these economic numbers. Thank you so much. And if you want a history of our podcast, you go to marketswithmegan.fm. Thank you.