Nonfarm Payrolls Increased More Than Expected

Pre-market trading took a nice jump higher on this morning’s long-awaited (government-delayed) non-farm payrolls report from the U.S. Bureau of Labor Statistics (BLS). That’s because headline jobs numbers reached their highest single-month level since December 2024 to +130K — double what analysts had been expecting. The Unemployment Rate also continued to tick down: +4.3%, down 10 basis points (bps) for the second consecutive month.

That’s a pretty neat improvement, but Wages are downright perfect: up month over month to +0.4% from +0.3% previously, but down to +3.7% year over year, which is the lowest monthly print in since February of 2021. Labor Force Participation was up slightly to 62.5%, while the U-6 read (aka “real unemployment”) sank to its lowest level since July to 8.0%, down 40 bps month over month.

By sector, Healthcare led the way once again, at +82K new jobs filled, followed by Social Assistance at +42K and Construction +33K. Interestingly, the biggest growth here was in non-residential construction, perhaps indicating data centers for AI are making their mark in the labor force. Meanwhile, the Federal Government shed -34K jobs last month, and Financial Services lost -22K.

Ideal as much of these headline numbers are, there are a few flies in the ointment. Chief among them was a reassessment of 2025 job growth, which ended the year +584K but has since been revised to a more paltry +181K. Thus, for as nice as today’s numbers look, keep in mind there are revisions likely, and they may be to the downside.

In all, there remain 7.4 million unemployed Americans (among those who had previously been in the workforce, so new college grads don’t count), 1.8 million of them the long-term variety. This number increased +400K over the past year. So while the market toasts yet another metric signaling a strengthening economy, we should remain aware that the labor force is not quite as strong as it was just a couple years ago.

Pre-market futures are up nicely on this news: the Dow +238 points, +0.46% — riding higher after another all-time high close Tuesday — the S&P 500 +40 points, +0.57%, the Nasdaq +196, +0.78% and the small-cap Russell 2000 is currently leading all major indexes at this hour: +24 points, +0.93%.

Earnings at a Glance

Kraft Heinz (KHC) beat earnings estimates by 6 cents to 67 cents per share in Q4, but news that the anticipated split into different companies is taking a back seat, as of this morning’s report. We see shares falling -6% as a result, swinging to a negative return year to date.

Tower Semiconductor (TSEM) outperformed earnings estimates  by +16.4% — 78 cents per share versus 67 cents in the Zacks consensus — and record revenues and raised guidance is seeing this stock climb more than +7% in early trading.

T-Mobile (TMUS) also outpaced estimates on its bottom line this morning, reporting $2.14 per share versus $2.03 expected, but the company missed subscriber targets for the quarter, and shares are selling -2.8% at this hour.

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This article originally published on Zacks Investment Research (zacks.com).

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