Bulwark Takes: Massive Jobs Revision Clouds Jan. Gains

Episode Title: BREAKING: Massive Jobs Revision Clouds Jan. Gains (w/ Paul Krugman)
Date: February 11, 2026
Host: JVL (The Bulwark)
Guests: Kathryn Rampel, Paul Krugman

Overview

This episode reacts in real-time to the latest Bureau of Labor Statistics (BLS) jobs report, which included not only unexpectedly strong job numbers for January 2026 but also a major downward revision for the previous year’s job growth. The panel — JVL, economics journalist Kathryn Rampel, and Nobel Prize-winning economist Paul Krugman — discusses the implications for the U.S. economy, labor markets, immigration policy, Federal Reserve independence, and financial markets, amid the Trump administration’s ongoing efforts to intervene in economic and institutional norms.

Key Discussion Points & Insights

1. January Jobs Report & 2025 Revision

• January’s Jobs Number:
  • The headline number for January was about 130,000 new jobs, nearly double expectations. However, Paul Krugman cautions on the volatility of monthly data, noting the statistical noise in short-term figures ([04:09]).
  • Krugman: “Monthly job numbers are just very noisy... If you actually drill into the details of the BLS report, it says that we gained 130,000 jobs, plus or minus 123,000.” ([04:09])
• 2025 Downward Revisions:
  • Annual revisions show 2025 job gains were revised down from 584,000 to only 181,000, indicating much weaker growth than previously thought ([02:05]).
  • The relatively small number is historically weak — especially because most new jobs have come from healthcare and social assistance, which are “less sensitive to the business cycle,” reflecting demographic shifts rather than vibrant economic expansion ([02:05]).

2. Sectoral Trends & Labor Market Realities

• Manufacturing Job Losses:

  • Discussion of underperformance in manufacturing and other sectors, contrary to political narratives about revitalizing blue-collar employment ([03:51]).

• Healthcare & Immigrant Labor:

  • Growth is concentrated in sectors dependent on immigrant labor, especially as the population ages. About 40% of home health aides are immigrants ([06:16]).

3. Immigration Policy, Deportations & Economic Impact

• Shifting Narratives About Immigrants and Jobs:
  • Trump administration rhetoric has oscillated from blaming immigrants for “stealing” jobs to using declining job growth as “proof” that deportations are shrinking the workforce.
  • Rampel: “The narrative to date has been there is like a set number of jobs...and either go to immigrants or they can go to native born Americans. It’s zero sum...” ([07:29])
  • Krugman: “If we reduce the growth of the working age population by 1% through deportations, we’re going to reduce economic growth by 1%. That’s roughly what’s going to happen.” ([09:40])
• Demographic Stress:
  • Krugman notes that removing immigrants undermines the fiscal basis for Social Security and Medicare by shrinking the working-age population that pays taxes ([09:40]).
  • Krugman: “A lot of the tax revenue that we were counting on is going to come from foreign born workers. Actually in some ways illegal undocumented immigrants are actually ideal because they pay the taxes, but they aren’t actually entitled to the benefits.” ([09:40])

4. Federal Reserve, Rate Cuts & Political Pressure

• Market Response to Economic Data:
  • Equity markets are largely flat despite the report; attention is focused on the Fed’s response, especially regarding interest rate cuts ([12:15]).
• Fed Independence Under Threat:
  • The tradition of presidential non-interference has eroded, with Trump openly pushing for rate cuts and nominating Kevin Warsh as Fed Chair.
  • Rampel: “The overt politicization of the Fed I am quite worried about...That credibility has been hard won...It takes a really long time to build it up but not very much time to cut it down.” ([16:43])
  • Krugman: “We are in a situation where just thwarting Trump’s will...may turn out to put you at personal risk...of having your life ruined.” ([18:36])
• Potential for Coercion:
  • Concerns raised about DOJ investigations targeting Fed officials as a method of presidential leverage.

5. Economic Uncertainty & Business Caution

• Uncertainty Affecting Hiring:
  • Businesses face uncertainty due to erratic trade policy (rumors about ending the US-Mexico-Canada Agreement), presidential interference, and the threat of sudden regulatory changes.
  • Krugman: “How are you supposed to plan, how are you supposed to do business? And this has got to be weighing on, among other things, on hiring.” ([27:06])
• Corporate Silence:
  • Rampel laments that CEOs who know Trump’s policies are harmful remain publicly quiet or even praise the administration, fearing reprisal ([28:28]).

6. Interpreting Financial Markets’ Calm

• Markets Seem Unperturbed:
  • JVL questions why markets haven’t signaled alarm given mounting economic and political instability ([32:00]).
  • Krugman: “Trying to understand why the market does what it does is always kind of a mugs game... For whatever reason, we’ve been risk on, people have pushed into stock markets and in fact every other major stock market is up by more than the US market.” ([33:07])
  • Rampel: “A lot of the growth...in The S&P 500 is...due to these AI companies or AI related stocks...the so called Magnificent 7, they are driving a lot of the growth.” ([35:21])
• Bubble Warnings:
  • Signs cited that AI and tech-related stocks are in a speculative bubble, potentially masking deeper issues in the broader market ([35:21]).

7. A Slacker, Slowing Labor Market

• Hidden Weakness:
  • Unemployment is up slightly but not dramatically. Below the surface, hiring is historically low and it’s increasingly tough to find jobs if unemployed.
  • Krugman: “If you have your job, probably okay. But if you are looking for a job...It’s really very, very hard to find a new job.” ([25:14])
• Contributing Factors:
  • Policy uncertainty and erratic administration actions may be freezing job creation.

Notable Quotes

• Paul Krugman on Labor Market Churn
  “It’s a weirdly frozen labor market in which there haven’t been a lot of big layoffs, but there’s also historically low hiring.” ([25:14])

• Paul Krugman on Market Risk:
  “The crisis takes longer to happen than you can possibly imagine and then when it happens, happens more quickly than you can possibly imagine.” ([33:07])

• Kathryn Rampel on Fed Threats:
  “If this President is already using...levers to pressure Powell or punish Powell at the very least, then what makes us think that he’ll have any reservations about doing the same thing for the other members on the Fed board?” ([16:43])

• Krugman on Immigrants and the Fiscal Future:
  “Who's going to pay for our retirement? So this is all very serious. And then there's the fact that immigrants are doing a lot of jobs that heritage Americans don't want to do.” ([09:40])

• Rampel’s Summation of the Markets:
  “The rest of the world excluding the United States [is] doing much better. And...a lot of the growth in...the S&P 500 is...due to these AI companies or AI related stocks...So the rest of the market not doing so great.” ([35:21])

Timestamps for Key Segments

• [02:05] – Kathryn Rampel sets up the jobs report, revising 2025 numbers sharply downward
• [04:09] – Krugman on volatility/noise in monthly job stats
• [06:16] – The role of immigrants in labor markets and eldercare
• [09:40] – Krugman on the negative macroeconomic/fiscal impacts of deportations
• [12:15] – Market and Fed response — expectations for rate cuts
• [16:43] – Threats to Fed independence and fears of politicization
• [18:36] – Legal risks facing Fed members amid politicized environment
• [25:14] – Krugman and Rampel: labor market is “frozen,” with low layoffs but also historic lows for hiring
• [27:06-28:28] – Uncertainty from trade policy and “command economy” interventions
• [33:07] – Why the stock market remains buoyant — “magnificent 7”/AI bubble, possible global risk-on sentiment
• [35:21] – Rampel details tech/AI bubble’s oversized influence on U.S. markets
• [37:38-38:05] – Lighter moments about Super Bowl AI ads and comparisons to the dot-com/crypto booms

Tone

Conversational, slightly irreverent but deeply informed — panelists blend humor, skepticism, and a healthy dose of concern about both current economic conditions and the state of institutional integrity in the U.S.

Takeaways for Listeners

• The strong job headline for January is overshadowed by a dramatic downward revision for 2025, pointing to a notably weak labor market beneath the surface.
• Immigrant labor is crucial to many sectors; deportations are exacerbating workforce shortages and threatening the fiscal future of social insurance programs.
• The independence of key economic institutions like the Fed is now in question, as political pressure mounts.
• Markets appear calm, but this may reflect global trends and speculative behavior in narrow sectors (especially AI and tech) rather than underlying U.S. economic health.
• Growing uncertainty, especially on trade and regulation, is weighing on business hiring and investment.
• The episode is both a snapshot of a major news event and a deeper meditation on the fragility of essential economic pillars in a period of political disruption.

For those seeking clarity amid headline noise and political spin, this episode provides candid analysis, skepticism about official narratives, and a warning about the hidden weaknesses that lurk beneath the surface of both headline economic figures and the market's apparent calm.