SOTS 2nd Hour: Goldman's Chief U.S. Equity Strategist, Plus: Airbus, Starbucks, PNC CEOs 9/9/25

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Sara Eisen (1:10)

Good Tuesday morning, welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. I'm joining you today from the Barclays Global Financial Services Conference in New York City, where we've got a great line up of guests for you, including PNC CEO Bill Demchek joining us this hour. Fresh off a multi-billion dollar deal to buy First Bank, just announced this week. Plus the CEO Barclays coming up later this morning as well. Also, in just a few minutes, breaking employment numbers when we get those preliminary benchmark revisions to employment data going back a year could show a big downward correction. But first up, check out the markets this early Tuesday morning. We are seeing some strength. The S&P 500 up a little more than a 10th of a percent. Leaders, energy, oil prices firm with geopolitics and focus. Communication services also doing well. Some of the media names like AT&T and Verizon, also Google and Meta helping that trade. Industrial and materials lag. The NASDAQ is unchanged. Treasuries quickly, I'll just show you because they halted a four day wind streak. Coming off of that weaker employment data last week, let's see how they react to the job revisions in just a moment. The 10 year yield lower though now. There is a little bit of a turnaround, 4.04%.

Guys, there's this narrative in the markets now around stagflation, which it just means slower growth and higher inflation as a risk. I'm going to push back against it with some of the data that we got today. Just put it on your radar. The Small Business Survey, that's NFIB Optimism. We get it every month. Guess what? It showed another improvement. That's a good thing. Small business is feeling a little bit more confident about the outlook. The number there goes above 100 We're not as confident as we were, say, early after the election, but things are getting a little better from the small business world. We are getting those payrolls revisions. Let's go to Steve Leesman, who's been looking into that. Steve, what do you see?

Steve Leesman (3:02)

I see the biggest revision we've had. I go back 25 years here. This may be the biggest revision ever, Sara. Minus 911,000.

Payroll growth from April of 2024 through March of 2025, is 911,000 less than previously reported. What has happened now to the month over month, or the monthly growth rate has gone from what we thought was 147,000 a month to now just 70,000 a month. So 1.7 million jobs is now 847,000 jobs created over that period. So over that time period, payrolls were quite a bit weaker. Remember, this is the period ending five months ago. This is the annual benchmark revisions. It's done every year. This is a preliminary number. Over time, it tends to actually be revised a little bit higher. The revision to the revision ends up being a little bit higher, but right now, it's suggesting much weaker payroll growth. I will point out that this is definitely to the high side of what I've seen from Wall Street analysts. Now, you have to plug in your... You have to start thinking about what does this say about today? In other words, this data is five months old. We won't know until the final revisions in February, which month each of the weakness belongs to, but we do know a bit about which industries it belongs to. We have a chart here, 880,000 from the private sector. The biggest revision came from Trade, Transportation and Utilities of 226,000. 126,000 off in retail. Leisure and Hospitality is down 176,000. Professional Business Services is down 158,000. So, widespread in the, I don't see it here, not a lot in private education and health services was the big, you can see the recent revisions there. The second biggest revision that I have, Sara, in my records is 2009 in the wake of the great financial crisis. And what had happened in that situation was some of the modeling was wrong. Some of the birth, death of businesses was wrong. This may be the case right now. We might have come into this year with much more weakness than we thought we had in the job market. It was okay. It seemed to be like the unemployment rate remained relatively stable. So, whatever we were doing was okay to keep the unemployment rate, a separate survey, relatively low. But, we were not creating as many jobs as we thought.