Last night, the U.S. January non-farm data was released, with an addition of 130,000 jobs far exceeding the expected 75,000. On the surface, it seems that the U.S. economy has made a turnaround at the beginning of 2026, directly contradicting the rate cut advocates. However, Moody's chief economist Mark Zandi provided a timely cold shower: don't be fooled, the good times won't last long.
Upon closer examination of this report, there are three ghost stories that investors should be wary of:
1. Growth relies entirely on 'revisions': If we consider the significant downward revisions of historical data, the U.S. job market has actually been stagnant since April of last year, with no substantive growth.
2. A single tree cannot support the forest: Almost all growth comes from the healthcare sector. Excluding healthcare, other industries are experiencing significant job losses. When an economy relies solely on doctors and nurses to hold the fort, it is not far from recession.
3. A wave of layoffs is brewing: Giants like Amazon and Meta are constantly laying off employees, and layoffs across the industry have reached a high point not seen since 2009. Zandi warns: Keep an eye on the number of initial unemployment claims; once it breaks through the 250,000 mark, a collapse could happen in an instant.
Let's talk about the impact on the market:
Wall Street has surrendered. Major banks like CIBC and Citibank have delayed interest rate cut expectations, and the dream of a rate cut in March has been shattered. The focus has now shifted to June or even July. This means that the high interest rate environment will last longer, and whether the fragile real economy can withstand it is a big question mark.
This Friday's CPI data will be a key battle to determine life or death. If inflation does not cool down as expected, the risk of a double whammy in stocks and bonds cannot be underestimated.