SOTS 2nd Hour: White House Jobs Reaction, Goldman's Chief Economist, & LIVE: Robinhood CEO 2/11/26

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Sara Eisen (0:57)

Good Wednesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live as always. A post sign of the New York Stock Exchange. Take a look at stocks they are gaining after this morning's blowout jobs report. We're going to get the administration's first reaction to the print. Counselor to the Treasury Secretary, Joe Lavorgna joins us in just a few moments. Plus news of AI advancements crushing software stocks here to date, Apollo Asset Management co-president John Zito is here to tell us what it all means for the private credit space. And then Robinhood shares under pressure after earnings last night, recent crypto weakness hurting that stock. CEO Blatt Tenet will join us first on CNBC. And next hour, a rare and exclusive interview with Greenlight's David Einhorn. His thoughts on the AI trade, valuations and much more.

Carl Quintanilla (1:44)

First though, some breaking news out of the Congressional Budget Office. For that, we'll turn to Steve Leesman.

Steve Leesman (1:49)

Morning, Steve. Hey, Carl, the CBO estimating that the deficit will total 1.9 trillion in calendar year 2026 That's up 100 billion from their prior forecast. And that deficit is going to grow to 3.1 trillion in 2036 Deficit will be 5.8% of GDP in 2026, growing to 6.7% in 10 years. Dead held by the public rises to, from 101% to 120% in that 10 year period. It raised its deficit projection by 1.4 trillion over a 10 year period, compared to the prior forecast. That's because of policies from the administration. The big beautiful bill raising the deficit by 4.7 trillion over the 10 year period, tariffs lowering it by 3 trillion, immigration policies going the other way, increasing the deficit by 500 billion. They did upgrade growth for 2026 That's good. They see the labor market improving this year. Inflation will hit the Fed's 2% goal by 2030 On the effects of the president's policies, the CBO says boost the short run economic growth, raises long term productive capacity. That's good. Trade policy continues to weigh on growth, says the CBO, raising the cost of imported goods, reducing foreign investment, lowering efficiency of the US economy, immigration, slowing labor force growth, putting downward pressure on output. Very quickly on the big downward revisions in the job markets, we had 1.5 million jobs created in 2024 We thought there was 584 after revisions, just 181,000. We did the math for you by month. Here it is, 122,000 per month in 2024 We thought it was 50,000 in 2025 Now, guys, just 15,000. The big question, is that 130,000 a new start to job growth? Or Sara, you tell me, is it something that's out of sample of where we were?

Sara Eisen (3:37)

Well, it has been out of sample, but I do wonder if it's a new start. There are definitely some green shoots in there, like manufacturing. Thank you, Steve.

Steve Leesman (3:45)

Let's hope.

Sara Eisen (3:46)

Steve Leesman. We do have, let's just summarize what we got on jobs because it was a very good number. The economists were all wrong, again, and the White House didn't exactly set us up because they were predicting, I think, a down number. I have Kevin Hassett and Peter Navarro both talking about weaker jobs numbers. Well, guess what? 130,000 jobs added in January, way above the expectation on Wall Street, which is around 55,000. And also, above where we have been, as you can see, which is why I think Steve is asking whether this is the start of a new trend. Unemployment rate, because of those good numbers, different survey but comes down to 4.3 percent, very good number. I mean, obviously, Steve mentioned the downward revisions over the last year. If you dig into where the jobs were added in January. So healthcare, no surprise, this has been a big job gainer and it's not a really cyclical group, right? It doesn't necessarily say, okay, the economy is finding all sorts of new momentum. Same with social assistance, but construction, 33,000 jobs. We announced the data center builds every single day. So no surprise maybe that that's where the strength is. That tells us a picture of the economy, which is not everything is strong, at least in the goods producing sector. But I mentioned manufacturing. We did see a rise there. 5,000 jobs, it was small, but it was a positive number and that's the first time we've seen that since 2024