Evercore's Krishna Guha on his expectations for the first jobs report of 2026

• The underlying growth rate of the US labor force has substantially stepped down, making a modestly negative jobs report (e.g., 30-50k) not catastrophic and potentially a new norm.
• The unemployment rate is expected to edge up a tenth, influenced by general economic uncertainty and 'secular AI-related effects' on the labor market.
• Low labor market turnover (low hiring, low firing) is making it difficult for new entrants, such as recent college graduates, to find jobs, but the market is expected to gradually stabilize.

Krishna Guha discusses the upcoming jobs report and CPI, noting a wide range of estimates for jobs, including potential negative prints. He suggests a modestly negative jobs number wouldn't be catastrophic, as the underlying labor force growth has substantially stepped down. He anticipates a slight rise in the unemployment rate and attributes labor market shifts partly to AI-related effects and low turnover.