Monthly Jobs Report

January 9, 2026

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Summary

Happy Friday folks.  We made it.  After a roller coaster of a week, today seems … well … anticlimactic?  Fine with me.  Boring is an underrated positive for the stock market. The market is up slightly at the moment.  S&P 500 +0.4%.

Today, we got the all-important monthly jobs number.  We’ll go through that below.  But, as it turns out, we will NOT get a Supreme Court ruling on President Trump’s tariffs today.  Oh well.  That’s not really important though, right?  I mean, just take your time, Supreme Court.  We’ll wait.

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Monthly Jobs Report

The first Friday of every month is "jobs day". That's when the Bureau of Labor Statistics publishes its first estimate of the jobs created in the prior month and the unemployment rate.

Now, you might not get excited about jobs day.  (My wife is testament to that.)  But let me explain.  Jobs day is important because: (1) a recession is usually very, very bad for the stock market and (2) if the economy is weakening, we usually get rate cuts.  And the market loooves rate cuts.  The sweet spot is that “goldilocks” level of the economy – not too strong, not too weak – we want it just right.  

So how was the porridge this month?  Cooling off, but not cool enough.

Growth in total number of jobs is still very low (+0.5% y/y vs 1.9% typically).  

Over the last 40 years, the median monthly growth in total workes was +1.9% y/y. So we're below trend. That’s suboptimal.  In fact, anytime job growth has fallen below +1% per year, a severe recession has followed soon after.  And growth has slowed every month in 2025.  

But… for now at least, the market is counting on productivity growth to offset job growth.  Fears of a recession seem to be nonexistent.

And, importantly for the Fed, the unemployment rate was basically unchanged  (4.4% vs 4.5% last month).  That’s up a lot from last year.    (Number of people unemployed was up +9.2% vs last year.)  But the trend has flattened for now.  That is what the Fed is focused on.  Wage growth is still steady at 3.8% -- comfortably above inflation.

So, what’s that all mean?  It means the Fed is not going to cut rates again if things are not getting worse.

The odds of a rate cut in January are basically off the table now.  The next Fed meeting after that is not until March.  Net-net, the Fed is unlikely to be a major market driver anytime soon.  (Perhaps we’ve already seen the last rate move of Jay Powell’s tenure as Fed Chair?)    

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Final Thoughts

Unless the CPI data next week shows a dramatic move, the Fed might be on hold for the near-term.

But fear not, market watchers.   The #1 market mover of them all starts next week:  earnings season! So we’ll have a new slog of data to pour through and worry about.