Evercore's Krishna Guha on January 2026 Jobs Report Expectations

The January 2026 Employment Situation report represents a particularly significant economic data release due to the convergence of multiple factors that introduce elevated uncertainty into labor market assessments. The partial U.S. government shutdown that began in October 2025 delayed the BLS’s standard reporting schedule, creating a one-month gap in official employment data that has left markets and policymakers operating with limited high-frequency labor market indicators [2][3]. Krishna Guha’s appearance on ‘Money Movers’ to discuss these expectations underscores the importance analysts and investors place on understanding the true state of employment conditions before the data becomes available [1].

The consensus forecast for January nonfarm payroll additions ranges from +55,000 to +80,000 jobs, though this figure obscures substantial disagreement among major forecasting institutions [1][2]. Goldman Sachs has adopted a notably bearish stance, projecting just +45,000 jobs added, while Mark Zandi of Moody’s Analytics suggested to CNBC that “zero would be the forecast,” reflecting concerns about the underlying strength of labor demand [1]. Conversely, Citigroup projects +135,000 jobs but acknowledges that seasonal adjustments leave net growth “closer to zero,” highlighting the methodological complexities affecting this particular report [1]. This dispersion of forecasts among respected forecasting entities signals elevated uncertainty about labor market conditions and emphasizes the importance of the benchmark revisions that will accompany the January data release.

The most significant analytical development surrounding the January 2026 report involves annual benchmark revisions that could fundamentally reshape perceptions of 2025 labor market performance. Goldman Sachs estimates preliminary revisions could show 750,000-900,000 fewer jobs than previously reported for the prior year, while Federal Reserve Chair Jerome Powell has publicly referenced figures closer to -600,000 jobs [1]. These revisions could effectively downwardly adjust 2025 monthly job growth averages by approximately 80,000 positions per month, transforming what appeared to be moderately healthy employment gains into a picture of more stagnant growth [4]. The primary drivers of these revisions include declining survey response rates, adjustments to the BLS birth-death model in the post-pandemic environment, and measurement gaps related to immigration patterns that have complicated seasonal adjustment methodologies [4].

The ADP employment report released prior to the official BLS data showed only 22,000 private sector jobs added in January, providing an early signal of labor market softness that has reinforced concerns about the upcoming official figures [3]. More concerning, January 2026 job cuts reached 108,435 positions, representing an 11.8% year-over-year increase and marking the steepest monthly decline since 2009 during the aftermath of the Global Financial Crisis [6]. This divergence between the official establishment survey and real-time labor market indicators has created analytical uncertainty about which measure more accurately reflects underlying economic conditions. The construction sector has been particularly impacted by immigration limits, while healthcare has maintained relative momentum as the most consistently positive employment contributor [2].

Equity markets have demonstrated notable resilience ahead of the jobs report release, with the S&P 500 gaining 1.09% for the week, the NASDAQ advancing 1.13%, and the Dow Jones rising 1.56% despite elevated uncertainty surrounding labor market data [0]. However, the February 10 session showed mixed performance, with the S&P 500 declining 0.24% to close at 6,957.76, the NASDAQ falling 0.47% to 23,162.97, and the Dow Jones advancing 0.16% to 50,274.42 [0]. Sector rotation patterns reveal meaningful investor positioning shifts, with Basic Materials (+1.71%) and Consumer Cyclical (+1.11%) sectors outperforming, while Consumer Defensive (-1.65%) and Technology (-0.87%) experienced notable weakness [0]. This rotation pattern suggests investors are positioning for potential economic acceleration in cyclically sensitive sectors while reducing exposure to previously defensive positioning.

Several risk indicators warrant attention for analysts and market participants evaluating the January employment data. The combination of elevated job cuts, weak private sector hiring signals, and anticipated benchmark revisions creates substantial probability of a report that disappoints consensus expectations. If benchmark revisions reveal significantly weaker 2025 labor market conditions than previously understood, this could trigger reassessment of economic growth narratives and corporate earnings projections that have been predicated on moderately strong employment data. The concentration of employment gains in healthcare creates additional vulnerability, as any slowdown in that sector would have outsized impacts on aggregate employment figures [2].

The Federal Reserve’s policy trajectory remains a critical variable linking labor market data to financial market performance. The federal funds rate currently resides in the 3.50%-3.75% range, with most economists expecting the Fed to hold rates steady at the March FOMC meeting regardless of the January jobs report outcome [2][5]. Chair Powell has characterized the labor market as showing “signs of stabilization,” suggesting the Fed views employment conditions as adequate rather than requiring urgent monetary accommodation [5]. However, the pending leadership transition, with President Trump announcing Kevin Warsh as Powell’s successor, introduces additional uncertainty about the medium-term policy direction [2]. Fixed income markets currently price in the highest probability of a rate hold for March, with potential cuts expected later in 2026 contingent on incoming inflation and labor market data [5].

Market participants should acknowledge significant information limitations affecting analysis of the January 2026 report. The specific quantitative forecasts from Evercore ISI, the firm Krishna Guha represents, were not detailed in available sources, limiting the ability to assess the institutional view Guha may have articulated during his appearance [1]. Additionally, the full impact of the October 2025 government shutdown on economic activity during the January measurement periods remains uncertain, as the BLS maintained data collection operations during the shutdown but broader economic disruption may affect survey responses [2][3]. The timing of benchmark revision releases and their interaction with seasonal adjustment methodologies introduces additional analytical complexity that will require careful interpretation once official data becomes available.

The January 2026 Employment Situation report, releasing February 11, 2026 at 8:30 AM EST, presents elevated analytical uncertainty stemming from government shutdown-related delays, anticipated benchmark revisions, and divergent private sector labor market indicators [2][3]. Consensus forecasts project modest job gains of +55,000 to +80,000 positions, though major institution estimates range widely from +45,000 (Goldman Sachs) to +135,000 (Citigroup, adjusted downward for seasonal factors) [1][2]. The unemployment rate is expected to remain at 4.4%, unchanged from December 2025 [1].

Market performance ahead of the release has been constructive, with major indices posting weekly gains of 1-1.5% despite sector rotations favoring cyclically sensitive Basic Materials and Consumer Cyclical names while retreating from Consumer Defensive and Technology positions [0]. The Federal Reserve is expected to maintain its wait-and-see approach to policy at the March FOMC meeting, with benchmark revisions and subsequent employment data shaping medium-term expectations rather than any single report [2][5].

Key monitoring dates include the February 11 jobs report release, the delayed January CPI release on February 13, and the March FOMC meeting that will represent the first major policy decision following potential Fed leadership changes [2][5]. Market volatility around the report release is likely given the magnitude of anticipated benchmark revisions and their implications for economic growth assessments.