Why A Hot Jobs Report Spooked Wall Street

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**Ed Elson** (1:53)
Welcome to Prof G Markets. I'm Ed Elson. It is June 9th. Let's check in on yesterday's market vitals.
The S&P 500 and the NASDAQ rebounded from Friday's sell-off. More on that in a second. Chipmakers rallied, with Intel jumping 10% on news that Google ordered 3 million chips from the company. Oil eased, as Israel and Iran pledged to halt their strikes. And finally, Apple stock fell nearly 2% on lackluster AI product news at its developer conference. Okay, what else is happening? The May jobs report dropped on Friday, and while it was a blowout, markets took it as bad news. The economy added 172,000 jobs last month, more than double what forecasters expected. The unemployment rate held steady at 4.3%, plus the March and April reports were also revised higher, adding another 93,000 jobs. However, this strong report caused a massive sell-off on Friday. The S&P closed down almost 3%, and the NASDAQ fell more than 4%. That was its worst drop since Liberation Day. So, here to unpack this report and also why Markets reacted so badly, we are speaking with Justin Wolfers, Professor of Public Policy and Economics at the University of Michigan and also founder of Platypus Economics. Justin, great to see you. Thank you for joining us again on the show.
I wanna get into the Markets reaction, but before we do that, let's first just make sense of this jobs report, which was seemingly really strong. 172,000 jobs added in May. Previous reports revised upward.
Give us your read on what we saw in that jobs report.

**Justin Wolfers** (3:40)
I think we just saw really, really good news.
I feel fairly confident and comfortable saying that, but I wanna be clear, I will not normally see 172,000 and jump for joy. I'll normally say, look for confirmation with a few more months. And so one of the things that was so interesting is we're now at three very strong months in a row. So I'm more impressed by the fact that over the past three months, we've averaged job growth round about that pace. I think it's 188,000 a month for folks who are keeping score at home. That's the sort of, my mom's a very, very hard taskmaster. But if I brought home jobs numbers like that, my mom would probably say, well done, Justin, good job. And so I'd say that's the US economy. Well done.

**Ed Elson** (4:27)
What about people who see this jobs report, I've seen this online, and they say, I don't believe it, they're lying.
This is some sort of grift from the president. I mean, it seems that a lot of people, this is seemingly good news. A lot of people don't want to hear the good news because maybe their experience of the economy isn't great or they don't support the president. I mean, what would you say to those people who don't believe those numbers?

**Justin Wolfers** (4:53)
So I'm actually going to put out a piece tomorrow, which dives into exactly that set of issues. I'm going to relentlessly bore the hell out of my audience. So let me instead be fun and entertaining for yours.
My favorite moment was, look, I like to read the data in the most honest way I can. So when you see good news, you say, you're beauty. By the way, I got just an enormous amount of social media vitriol. It's completely clear that I've spent far too much time praising the president recently and people are upset at me.