INSTANT VIEW-US jobs beat for January affirms steady Fed view

NEW YORK, Feb 11 (Reuters) - U.S. nonfarm payrolls increased last month and the jobless rate ticked lower, beating forecasts and bolstering expectations that the Federal Reserve will keep interest rates steady as it gauges inflation trends. Nonfarm payrolls rose 130,000 jobs in January after a downwardly revised 48,000 rise in December, data showed. Economists polled by Reuters had forecast payrolls advancing by 70,000 jobs. Estimates ranged from a loss of 10,000 jobs to a gain of 135,000 positions.The unemployment rate meanwhile slipped 4.3% from 4.4% in December.

MARKET REACTION:

STOCKS: U.S. stock futures rose after the jobs data.

BONDS: U.S. Treasury yields increased after the payrolls report. The benchmark U.S. 10-year notes US10YT=RR was last up 4.5 basis points at 4.19%.

FOREX: The dollar index =USD initially gained, but turned lower again, last at 96.903.

COMMENTS:

JOEL KRUGER, MARKET STRATEGIST, LMAX GROUP, LONDON:

"The dollar is rallying on the back of a much stronger-than-expected jobs report and firm earnings, while risk assets are also higher as the data trims but does not derail expectations for a June Fed cut, creating a near best-case outcome for both the buck and broader markets."

JORDAN RIZZUTO, CHIEF INVESTMENT OFFICER, GAMMAROAD CAPITAL PARTNERS, NEW YORK:

"The underlying employment picture looks like it's stronger than what's expected and maybe somewhat stronger than what has been recently assessed and characterized by the FOMC. If these numbers hold, subject to revisions that we'll see in subsequent months, the implications for monetary policy are that we're closer to the neutral rate than the market was previously pricing in."

GARY SCHLOSSBERG, GLOBAL STRATEGIST, WELLS FARGO INVESTMENT INSTITUTE, SAN FRANCISCO:

The report was kind of a blow out, well ahead of the estimate. We'd a drop in the unemployment rate and gratifyingly it was due to a big increase in the household employment number ... Clearly both numbers showed a very good increase."

"For the economy it eases some of the concerns we had yesterday from a flat retail sales number ... we are looking for above average growth for 2026 as a whole and this certainly does nothing to dampen that outlook."

Stock futures are up on the strong number. The 10-year yield is up noticeably as well. That could be a potential break for the market down the road. But certainly, the market is running with the more upbeat explanation at the moment, that this confirms the above average growth that we've been seeing. Keep in mind too, we have a good deal of fiscal stimulus in the pipeline."

"This fits the narrative that the economy has been enjoying above average growth even if it loses some momentum from what we think was unsustainable growth during the summer."

"We don't want to make too much of one month's number, but clearly the job market does seem to better reflect the strength that we've been getting from most activity data notwithstanding yesterday's."

"It reinforces the view that the Fed will keep its powder dry at the March meeting. At the moment at least the June rate cut probability is still better than even but, that probability is down a bit. The market is growing a little more cautious for the outlook for the Fed rate cuts over the course of the year. We have another important number coming up Friday that will clarify things further."

SEEMA SHAH, CHIEF GLOBAL STRATEGIST, PRINCIPAL ASSET MANAGEMENT, LONDON: (via email)

Kevin Hassett’s caveat seems unnecessary in light of today’s jobs report. This was not a weak print; it was a very strong one, even allowing for the considerable noise likely embedded in the data. Against a backdrop of powerful structural forces that are suppressing headline job creation—retirements, shifting immigration dynamics, and AI‑driven productivity gains—the payrolls figure points to a labour market that remains firmly intact. Broad‑based employment gains, including a rare increase in manufacturing payrolls, alongside a decline in the unemployment rate and robust hourly earnings growth, underscore the economy’s resilience. In that context, the case for imminent Federal Reserve rate cuts looks thin. It will not be an easy task for Kevin Warsh to persuade the FOMC to ease policy at his first meeting: absent a clearer and sustained deceleration in inflation, the labour market will not make that case for him."

ART HOGAN, CHIEF MARKET STRATEGIST, B RILEY WEALTH, NEW YORK:

"The market was set up for a much weaker number as a multitude of White House speakers yesterday talked about how artificial intelligence was going to increase productivity and likely keep the labor market soft. I think this report today caught a lot of people by surprise. It is unambiguously good news. Not just the headline number, 130,000 jobs, but you also have unemployment ticking down another tick to 4.3% from 4.4% and the labor force participation rate went up, and the average hours worked went up. The only potential negative here is this likely pushes out the concept of a rate cut well into the second quarter. Otherwise, we certainly want to see jobs being created in this economy because the more jobs we have, the more spending we have, and the better earnings are. But good news for the economy can be bad news if you're expecting rate hikes. I don't think there's an expectation for rate cuts in the near term. I certainly think this will be seen long-term as a good news story."

BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN:

"We all knew there would be downward revisions, but these were better than expected. The labor market wasn't on a great trajectory towards the end of 2024. Payroll growth wasn't as strong as we thought to start 2025. The January 2025 number was revised to negative 48,000 instead of a positive 111,000. It was one shock after another since, so maybe we can start to get some traction."