SOTS 2nd Hour: August Jobs Report w/JPMorgan Chief Strategist & Goldman Chief Economist… & LIVE: Lululemon CEO 9/5/25

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Sara Eisen (1:10)

Good Friday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla. We are live as always from Post 9 of the New York Stock Exchange. David Faber has the morning off. Stocks are higher. S&P is up two tenths of a percent. NASDAQ doing even better at the half a percent. Despite a weaker jobs report, hopes for more Fed cuts, perhaps playing into the trade here. Materials are your best performers, along with real estate, consumer discretionary, communication services, healthcare rallies. Financials are under a little pressure. So are utilities, energy and industrials. We are chalking up more gains for the week, though. We're up almost a percent on the S&P and the NASDAQ's up 1.6 percent so far for the week. As for treasuries, reaction to the data, they're rallying. And that's why yields are lower across the board. The 10-year yield just above 4 percent there and the two-year note yield below 3.5. So pretty substantial move. Today, Goldman Sachs' first take on the JAWS report, chief economist Jan Hatzius will be here at Post 9 with what he thinks today's number means for the Fed. And the stock of the day, Lululemon, shares plunging right now after weaker guidance, competition in that leisure space heats up, the CEO will be here exclusively. And a potential trillion-dollar pay package for Elon Musk. We've got the details on Tesla's board's new proposal. We'll talk about that. But it's jobs, jobs, jobs, Carl. And this was another disappointment on the headline number, on the revision number. Look, economists were expecting around, I don't know, 70, 80,000 jobs. And what we got was a weaker number, 22,000 jobs added during the month of August. So that takes the three-month average, just to smooth things over a little bit, to 29,000, which was, you know, about 200,000 at the end of 2024 So we've really seen a deterioration in hiring. June, here was the key, was revised down by 27,000, from 14,000 to a negative number, actually negative 13,000. July was actually revised up, but if you take the revisions together for both months, 21,000 fewer jobs than what we expected. And there you can see what the last few months looked like in terms of job creation, unemployment rate goes up.

Where were the biggest job hits? Manufacturing, a lot of people are talking about, obviously that's been a signature of President Trump's administration and his goals. Well, they are losing jobs, 12,000, I think, no surprise, given what's happening with tariffs. And that sector has been in contraction. They're now down by almost 80,000 on the year.

Whole trade and employment, federal government. We know these are also areas where there's been pain, where the job gains have. Well, look, health care has been a standout, no question about it. Though we are seeing fewer and fewer jobs created in that sector, social assistance, that's where the jobs are. Education, that's kind of what we're seeing in terms of a bright spot. Just another flag is youth unemployment jumped to 10.5 percent, so that's a problem too. The good thing about all of this, the rate cut odds move up sharply. September is a lock. Now, October looks pretty good in the eyes of the bond market and even a cut in December. So the bond market is now telling us three more cuts. The Fed can go because there's reason to be concerned, as we've been saying here for a long time, about the job market. Yeah.

Carl Quintanilla (4:27)

The question is whether or not next week's CPI and PPI make this even more complicated.

Sara Eisen (4:33)

Sure. It would have to be a really outside, I think, inflation number because we expect a little bit of upward pressure on inflation because of the tariffs. That's to be expected.