Surprisingly Strong Jobs Report Hints at an Improving Labor Market

Summary

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WSJ What’s News PM – February 11, 2026

Episode: Surprisingly Strong Jobs Report Hints at an Improving Labor Market

Host: Alex Osola, The Wall Street Journal
Featured WSJ Reporters: Justin Leihart, Richard Rubin, Elizabeth Findell
Length: ~13 minutes (excluding ads/outros)

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Overview

This episode dives into the robust January 2026 U.S. jobs report, examining surprising labor market strength, sector-specific growth, and implications for further economic policy such as Federal Reserve interest rate decisions. The show also covers deficits in federal spending, industry shakeups (Kraft Heinz, American Airlines), the ongoing impact of immigration enforcement on South Texas construction, and fallout from the Epstein files in Los Angeles Olympic planning.

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Key Segments and Insights

1. Surprisingly Strong Jobs Report for January

[00:43–02:41]

• Headline: January job growth was far stronger than predicted: 130,000 jobs added (vs. 55,000 expected), and unemployment fell to 4.3% from 4.4%.

  • “The delayed January jobs report is here, and it’s better than investors and economists had expected.” – Alex Osola (00:43)

• Context:

  • Economists were surprised due to recent months of sluggish growth and assumptions of limited labor supply from lower immigration.
  • “We just don’t expect to see very high job growth these days because we have such lower immigration... the supply of workers is much lower.” – Justin Leihart (01:35)

• Sector Highlights:

  • Health care and social services are the main drivers of growth.
  • Construction saw increases, possibly due to more data center projects.
  • Manufacturing performed modestly better.
  • “It’s really, you know, health services, health services, health services, which has really been powering the job market for a long time now.” – Justin Leihart (01:59)

• Looking Ahead:

  • Demographics point to ongoing demand for healthcare jobs.
  • “We have an aging population… we’re going to see demand for these health care jobs continue.” – Justin Leihart (02:29)

2. Market & Monetary Policy Implications

[02:41–03:24]

• Impact: The strong jobs report weakens the case for imminent interest rate cuts, reinforcing expectations that the Federal Reserve will hold steady.
• Stock indices initially rose but closed flat or slightly down by the end of trading.

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3. Kraft Heinz Halts Breakup Plan

[03:24–03:38]

• Change in Strategy:
  • Kraft Heinz rescinds its plan to split into condiments and staples businesses.
  • CEO Steve Cahillane emphasizes focusing all efforts and resources on growth.
  • “We want to put 100% of our focus...against returning the company to growth and not be distracted by the massive amount of work required in the separation.” – Steve Cahillane (03:24)
• Sales: Reported a ninth consecutive quarterly decline, but shares rose 0.4%.

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4. Labor Turmoil at American Airlines

[03:38–04:36]

• Flight attendants’ union votes no confidence in CEO Robert Isom.
• Pilots’ union also voices concerns about company performance and leadership.
• Executives pledge operational improvement; Isom declines comment.

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5. US Budget Deficit Worsening: CBO Projections

[04:36–06:07]

• CBO Projects a deepening deficit: From $1.85 trillion (2026) to $3 trillion (by 2036).
• Main Drivers:

  • Rising Social Security, Medicare costs, and interest on accumulated debt.

  • Deficit to GDP ratio rising towards nearly 7% (typically only seen in emergencies).

  • “Those are deficit levels we haven’t hit outside of emergencies and wars and recessions, not in the middle of some emergency.” – Richard Rubin (04:36)

• Tax Policy:
  • Republican tax cuts extended permanently add about $4.7 trillion to the deficit.
  • “That tax law... increases deficits by about $4.7 trillion compared to had they just let the tax cuts expire.” – Richard Rubin (05:15)
• Risks:

  • Interest rate spikes.

  • Crowding out private investment.

  • Increasing burden to service debt.

  • “You run increasing risks, the larger and larger these debt and deficit numbers go.” – Richard Rubin (05:45)

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6. Pentagon Movements & Other Political Headlines

[06:07–07:23]

• Pentagon readies a second aircraft carrier for Middle East; deployment not formally ordered.
• President Trump signals preference for diplomacy with Iran post-meeting with Netanyahu.
• FAA airspace closure over El Paso clarified as result of miscommunication and mistaken drone targeting.
• Grand jury refuses charges against Democratic Senators over military order guidance; another legal setback for Justice Department.

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7. Epstein File Fallout Hits LA Olympics

[07:58–09:01]

• LA28 Olympics chair Casey Wasserman remains in post after review of Epstein connections; some artists and athletes leave Wasserman's agency.
• Wasserman apologizes as fallout continues.

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8. Immigration Raids Disrupt South Texas Construction

[09:01–12:21]

• Context:

  • ICE raids leave housing developments partially built and empty. Even legal workers fear detention.
  • “Builders can’t find anyone to work because they’re afraid they’re going to be picked up. And that includes people in the country legally and working legally.” – Elizabeth Findell (09:01)

• Example: Monte Ciello development (Weslaco, TX) raided 6+ times in months. Builders attempt makeshift defenses but with limited effect.

• ICE declined comment for the story.

• Wider Impact:

  • Supply chain ripples: banks, buyers, suppliers all affected.

  • Bankruptcy in related industries (e.g., 57 Concrete), layoffs, construction shutdowns.

  • “The effects of it trickle down… It affects the banks where builders … It affects people… It affects the material suppliers.” – Elizabeth Findell (10:37)

  • “You put the concrete in this foundation … and the ICE shows up. Grab everyone… The owner of that house [has a] half-empty, half-full foundation… They need to tear the foundation out and do it again. That cost him like $30,000 to $40,000.” – Eliud Cavazos, 57 Concrete CEO (11:21)

• Not Just Texas:

  • Similar stories from Minnesota, where stepped-up immigration enforcement leaves projects on hold due to labor shortages.

  • “We’re hearing in South Texas … they can’t find people to work. So projects are on hold and it’s costing builders a tremendous amount of money.” – Elizabeth Findell (11:57)

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Notable Quotes (with Timestamps)

• “We just don’t expect to see very high job growth these days because we have such lower immigration... the supply of workers is much lower.”
  – Justin Leihart, 01:35
• “It’s really, you know, health services, health services, health services, which has really been powering the job market for a long time now.”
  – Justin Leihart, 01:59
• “We want to put 100% of our focus...against returning the company to growth and not be distracted by the massive amount of work required in the separation.”
  – Steve Cahillane, 03:24
• “Those are deficit levels we haven’t hit outside of emergencies and wars and recessions, not in the middle of some emergency.”
  – Richard Rubin, 04:36
• “That tax law... increases deficits by about $4.7 trillion compared to had they just let the tax cuts expire.”
  – Richard Rubin, 05:15
• “You run increasing risks, the larger and larger these debt and deficit numbers go.”
  – Richard Rubin, 05:45
• “Builders can’t find anyone to work because they’re afraid they’re going to be picked up. And that includes people in the country legally and working legally.”
  – Elizabeth Findell, 09:01
• “The effects of it trickle down… It affects the banks where builders … It affects people… It affects the material suppliers.”
  – Elizabeth Findell, 10:37
• “You put the concrete in this foundation … and the ICE shows up... They need to tear the foundation out and do it again. That cost him like $30,000 to $40,000.”
  – Eliud Cavazos, 11:21

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Episode Structure / Timestamps for Major Sections

• 00:43 – January jobs report highlights & analysis
• 01:35–02:41 – Sector breakdown and job growth outlook
• 03:24 – Kraft Heinz strategic update
• 03:38 – American Airlines union discontent
• 04:36 – Budget deficit projections and risks
• 06:07 – Pentagon, political/legal headlines
• 07:58 – LA Olympics/Casey Wasserman and Epstein file fallout
• 09:01–12:21 – Immigration raids devastate South Texas construction
• 11:57 – Similar labor shortage stories in Minnesota

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Tone & Style

• The episode maintains a clear, matter-of-fact journalistic tone, driven by data, direct reporting, and first-person accounts from affected business owners and workers.
• Quotes from reporters and sources provide sharp, credible insight into the numbers and their real-world impact.

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Summary

A surprisingly strong January jobs report signals possible labor market resilience, primarily driven by surging health services demand, while underlying demographic and policy shifts temper optimism for continued rapid growth. The episode then pivots to deficit warnings, industry reorganizations, and grassroots economic consequences of immigration enforcement, weaving national statistics with personal stories for a comprehensive and nuanced look at interconnected forces shaping the American economy as 2026 begins.

Transcript

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[Alex Osola]

January's job numbers were the strongest in more than a year. Plus In South Texas, immigration raids mean half finished houses are sitting idle and empty.

[Elizabeth Findell]

The effects of it trickle down because it affects the banks where builders and others are getting loans. It affects people who are waiting to buy homes or move into homes. It affects the material suppliers.

[Alex Osola]

And the federal deficit is expected to deepen by trillions of dollars over the next decade. It's Wednesday, February 11th. I'm Alex Osola for the Wall Street Journal. This is the PM edition of what's news. The top headlines and business stories that move the. The delayed January jobs report is here, and it's better than investors and economists had expected. The US economy added 130,000 jobs in January, its strongest growth in more than a year. The unemployment rate fell to 4.3% from 4.4%. It's a sign that the labor market is shaking off its recent slump. But can it continue? For more behind the numbers, I'm joined by WSJ economics reporter Justin Lehart. Justin, the jobs numbers were more than double the 55,000 jobs economists had expected. Why were these numbers surprising to economists?

[Justin Leihart]

I think because of what they had seen over the past several months, which was very, very, very slow job growth. And also we just don't expect to see very high job growth these days because we have such lower immigration in the country and the supply of workers is much lower than it was before.

[Alex Osola]

What are the sectors that were doing well versus not so well?

[Justin Leihart]

I mean, it's mostly health care and social services are sort of adjacent to one another. There are other sectors that we saw growth in construction that could reflect the data center construction going on. Manufacturing did a little better, but it's really, you know, health services, health services, health services, which has really been powering the job market for a long time now.

[Alex Osola]

And just thinking ahead to the rest of the year, can we expect this jobs growth to continue?

[Justin Leihart]

We have an aging population. We have more health care needs. So it is natural to expect that we're going to see demand for these health care jobs continue.

[Alex Osola]

That was WSJ economics reporter Justin Leihart. Thanks so much, Justin. Thank you. The solid jobs report weakens the case for more interest rate cuts and made investors more confident that the Federal Reserve will keep rates on hold. Stocks rose today after the jobs report, but the major indexes surrendered their small gains in later trading. They ended flat or slightly lower. Kraft Heinz is pumping the brakes on its breakup plan. In September, the company announced that it was splitting its condiments and grocery staples businesses. Now Kraft Heinz says that isn't happening. Its new CEO, Steve Cahelane, says he's focused on returning the business to growth next year. The company is investing hundreds of millions of dollars in marketing and product development.

[Steve Cahillane]

We want to put 100% of our focus, 100% of our time, our people, our investment against returning the company to growth and not be distracted by the massive amount of work that's required in the separation.

[Alex Osola]

The company today announced a drop in sales for the ninth straight quarter. Shares closed up 0.4%. And employees of American Airlines are calling for its CEO to step down. This week, directors of American's flight attendants union issued a vote of no confidence in American Airlines CEO Robert Isom. And last week, the pilots union said it no longer believed management was improving the company's operations and financial performance. Executives at American have pledged to get the airline back on track and get delays and cancellations under control. Isom, through company representatives, declined to comment. A new estimate out from the Congressional Budget Office today projected that the annual U.S. budget deficit will worsen over the next decade. It's expected to deepen from $1.85 trillion this year to $3 trillion by 2036. WSJ US tax policy reporter Richard Rubin says there are three big factors behind this.

[Richard Rubin]

There is really just this growth in three big things in Social Security, Medicare and interest. This big interest cost that covers all the debt that we've racked up in the past. And so those things are just growing faster than everything else. We're running deficits 5.8% of GDP, heading towards 6.7% of GDP. We've done that before. But those are deficit levels that we haven't hit outside of emergencies and wars and recessions, not in the middle of some emergency.

[Alex Osola]

Rich says the CBO estimates that Republicans tax cuts will also contribute to a bigger deficit.

[Richard Rubin]

We had all these tax cuts that were scheduled to expire at the end of last year, the end of 2025. And so for a long time, CBO, the Congressional Budget Office has looked at that and said, oh, we're going to get all this revenue. And Congress and President Trump extended basically all of those tax cuts permanently and created some new tax cuts. That tax law, which also had some spending cuts, increases deficits by about $4.7 trillion compared to had they just let the tax cuts expire.

[Alex Osola]

He says having such a deep hole in the country's budget comes with risks.

[Richard Rubin]

The risk is that you run into a sort of crisis where interest rates go up or the federal debt is crowding out private investment, or the debt is so burdensome that bond investors demand we pay more in interest rates to service that debt. You just run increasing risks. The larger and larger that these debt and deficit numbers go.

[Alex Osola]

That was WSJ US Tax policy reporter Rich Rubin. In other news out of Washington, we're exclusively reporting that the Pentagon has told a second aircraft carrier to prepare to head to the Middle East. Trump hasn't yet given an official deployment order and plans could change. After his meeting today with Israeli Prime Minister Benjamin Netanyahu. President Trump posted on social media that he preferred to make a deal with Iran. Flights over El Paso resumed this morning, just a few hours after the airspace had been closed for, quote, special security reasons. We've learned that the Pentagon used a high energy laser against what officials thought was a drug cartel drone. The closed airspace was the result of a miscommunication between the FAA and the Pentagon. And a grand jury has refused to sign off on criminal charges for several Democratic lawmakers who told people in the military that they could disobey illegal orders. The lawmakers who prosecutors tried to indict include Arizona Senator Mark Kelly and Michigan Senator Alyssa Slotkin. It's the latest setback for the Trump era Justice Department in its attempts to prosecute the president's perceived enemies. Coming up, the fallout from the Epstein files reaches the LA Olympics Committee. That's after the break.

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[Alex Osola]

The organizers of the 2028 Los Angeles Olympics said today that Casey Wasserman will remain the committee's chairman. Several members of the city's leadership called for the LA businessman to step down from the Olympics committee after his name surfaced in the most recent batch of the Jeffrey Epstein files. After a review with outside counsel, the Olympics board found that Wasserman's relationship with Epstein and Ghislaine Maxwell, quote, did not go beyond what has already been publicly documented. There's also been fallout in his business. Singer Chapel roan and retired U.S. women's soccer star Abby Wambach have left Wasserman's talent agency. Wasserman issued an apology after the emails were disclosed. In South Texas, half built homes are sitting empty. Federal immigration agents have hit building sites in some case picking up entire work crews. That's putting projects months behind schedule and having a cascading effect on the industries that feed into it. Elizabeth Findell is a reporter based in Texas who joins us now. Elizabeth, why is the housing industry in South Texas being hit particularly hard here?

[Elizabeth Findell]

Well, it's just an area where we have seen repeated immigration raids sometimes hitting the same developments over and over again. So builders can't find anyone to work because they're afraid they're going to be picked up. And that includes people who are in the country legally and working legally. Two guards that I spoke with at a nearby detention center said they now have a significant proportion of men in their care who have valid work permits. And that's something that they had not seen under previous administrations.

[Alex Osola]

You visited a development called Monte Ciello in Weslaco. What's been going on there?

[Elizabeth Findell]

Yeah, that's one of the bigger developments in Weslaco, which is a town of about 40, 45,000 people. They have gotten raided by ICE numerous times. I heard estimates of at least six or more times in the last few months. And so workers really just don't want to work out there. And it was pretty empty when we were there. And builders are trying to do things like put up temporary fencing around their lots because ICE agents aren't supposed to go onto private property or they can be blocked from private property if they don't have a judicial warrant. But that only helps so far because the workers have to trust that the agents are going to abide by that and they don't in all cases.

[Alex Osola]

What did ICE have to say about this?

[Elizabeth Findell]

They did not respond, unfortunately, to our requests for comment.

[Alex Osola]

Got it. And it sounds like it's not just the housing developers that are feeling the impact here.

[Elizabeth Findell]

The effects of it trickle down because it affects the banks where builders and others are getting loans. It affects people who are waiting to buy homes or move into home homes. It affects the material suppliers. We spoke with a concrete supplier who filed for bankruptcy protection after he saw demand for his concrete fall some 60%, laying off employees as well. And their CEO, Eliud Cavazos, from 57 Concrete. He told me about seeing raids occur when they would go to drop off their concrete and builders would be left with half poured foundations.

[Eliud Cavazos]

You know, you put the concrete in this, in this, in this foundation, so you're in the middle and the eyes show up. So grab everyone. So the owner of that house have half empty, half full foundation. So you know my problem, they need to pay me number one. But you cannot use that foundation because he's wrong. They need to tear the foundation out and do it again. And that cost him like a 30, $40,000 to do that.

[Alex Osola]

Elizabeth, some of the stuff you're talking about seems kind of specific to South Texas. Are we seeing this in any other parts of the US it is happening.

[Elizabeth Findell]

In other places in the country, especially places where we've seen increased immigration enforcement activity, like in Minnesota. My colleagues spoke with builders in Minnesota and heard the exact same types of stories that we're hearing in South Texas, that they can't find people to work. So projects are on hold and it's costing builders a tremendous effort, amount of money.

[Alex Osola]

That was WSJ reporter Elizabeth Findell. Thanks, Elizabeth.

[Elizabeth Findell]

Thank you.

[Alex Osola]

And that's what's news for this Wednesday afternoon. Additional sound courtesy of S and P Global Market Intelligence. Today's show is produced by Pierre Bienname and Alexis Moore, with supervising producer Tali Arbel. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

[Richard Rubin]

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