Labor Secretary: January jobs number ‘jumped off the page’

Labor Secretary Marty Walsh joins Yahoo Finance Live to discuss the January jobs report, the state of the labor market, wage growth, the risk of a recession, AI, inflation, and the outlook for the economy.

Video Transcript

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BRIAN SOZZI: Today's unusually strong jobs report dashing hopes of a dovish Fed. This even after less hawkish Fed remarks and major earnings all within the span of a few short days. Let's get a broader look on where the economy is headed. Marty Walsh, US Labor Secretary, joins us now. Mr. Secretary, always nice to get some time with you. Your top takeaway off of this report?

MARTY WALSH: It was a good strong report, certainly far better than expectations. And when you look at the unemployment numbers, the rate, 3.4% unemployment rate, the lowest since May of 1969. The Black unemployment rate 5.4%, the second lowest ever recorded since the '70s, when we started recording those numbers. We've seen strong gain in business development, business and hospitality and leisure, and certainly in health care. So it's a good strong report. It shows that 12.1 million jobs have been added to the economy since or created since President Biden has taken office. So it's something. It's good momentum.

JULIE HYMAN: It is good momentum, Marty. Excuse me, Secretary Walsh. It's Julie here. And what-- do you expect that momentum to continue? What do you think happens from here going into 2023? How are you sort of thinking about the year and preparing for what we're going to see in the job market?

MARTY WALSH: Well, you know, I think certainly this number jumped off the page when we saw it, and it was a big number. I think that you think-- we saw the labor participation rate tick up a bit. There's still many openings in the United States for jobs. So I think that our job, our focus, my focus will be working, making sure that we get that participation rate up even higher and getting more people into jobs, whether it's training or apprenticeship or workforce development.

So there is real opportunity here. We talked about it a little bit. I've talked about it for the last year on this call-- on this interview, I should say. You know, I think that some of the policies that we laid out there-- the CHIPS bill, the Infrastructure bill, the IRA-- those are going to create more jobs as well. I mean, some of those jobs might be replaced from other areas that are slowing down. But I think there's real opportunity here moving forward.

BRAD SMITH: We've talked about those jobs that are going to be created and kind of classifying them as good-paying jobs that would allow people to earn a living. And for the environment that people have had to navigate through over the past year and change, it has been one where prices are higher for everything from the necessities to all the way through the services that they choose to pay for as well. And so when you think about that target of what a good-paying job is, how does that change within the administration perhaps even quarter over quarter at this point so that people do have the opportunity to kind of maintain the ability to save and earn a living as well?

MARTY WALSH: Yeah, well, I think, first and foremost, we've seen wages grow 4.4% year over year. Inflation is roughly 6.4%. So I don't think it's just about closing the gap between wages and inflation. It's about creating a pathway for families to be able to get into the middle class, buy a home, buy a car, keep food on the table, and be able to have a little money in the bank savings. So I think that that's-- when I think of that, that's what I look at. It's not just simply closing the gap.

And two weeks ago, I was in Switzerland and Austria, and I was looking at the apprenticeship programs there. And not just looking at the programs laying out, but really about the opportunity for middle class. And I think that we just have to continue collectively to work together. I think Congress made a determination over the last two years to make major investments in infrastructure and other things.

I think what we're going to do now is capitalize on those investments. So again, it's not just about closing the gap between inflation and real wages and year over year earnings. It's about making sure that people have long-term sustainability into a job that they can be proud of and allow them that opportunity, as President Biden said, build an economy from the bottom up and the middle out.

BRIAN SOZZI: Mr. Secretary, when you travel around the country, are you just surprised that so many folks in the markets are talking about a recession? I mean, do you see any signs of recession in the places you travel to?

MARTY WALSH: No. You know, I kind of-- I said a long time ago, I'm not-- I think this economy and what we're experiencing right now is very different. It's hard to-- it's hard to put into words. And I think economists are trying to figure out how to put this into words. And, you know, I think that we just have to keep signs on, making sure our construction markets are strong, making sure that when you have a conversation around the tech sector, laying people off, you want to see if that's a short term or is that a long-term problem, and again, just monitoring those and responding.

And in 2021, when the president took over, he laid out a plan to get people back to work. In 2022, the beginning of the year, he laid out a plan on inflation because that was a big issue, on rising gas prices. And we're working-- we stayed to those plans. And I think that folks at the White House and working with the private sector have done a really good job of trying to identify a challenge and addressing those challenges.

BRAD SMITH: I'm glad you mentioned some of the layoffs within the tech sector, Labor Secretary, because when we think about the reason that's been given by some tech companies, it's because they're moving towards solutions that are more artificially intelligent and to increase productivity, from their perspective. But I wonder, from your perspective, whether or not artificial intelligence, if AI is a threat to some of the employment situation goals more long term?

MARTY WALSH: I don't know how-- obviously, everyone's-- it's somewhat of a concern in employment goals, obviously. I can't say it's not. But I think long term, I'm not sure. You know, I've heard a lot of different reasons why-- well, several different reasons why the tech sector is making layoffs. You know, I think that it's kind of a watch and see approach as you move forward here to see what happens.

I think in those tech sectors, you still need people. You still need people invested in those areas. And I'm not sure how much artificial intelligence-- maybe in the long run there'll be a lot more artificial intelligence. I think in the short run, you're still talking about you need a workforce. But again, you know, I think-- I'm always of the mindset, let's not panic about modernization. Let's try and work with it and see how we can move forward with it.

JULIE HYMAN: And finally, Mr. Secretary, there's starting to be a little bit of turnover in this White House. Brian Deese, for example, just confirmed he's going to be stepping down. There are some reports-- I can't imagine you're going to comment on this, but I got to ask you about it anyway. There are some reports that you've been approached to head up the NHL Players Association. Are you getting antsy there at all? What are your thoughts on this year and whether you're going to be sticking around?

MARTY WALSH: Well, I can tell you, I'm not going to make any personal news today. And, you know, I think that when I think about the job I have and other folks in the White House, what they have, people have been working really hard for the last two years for the-- on behalf of the American people at the direction of President Biden. And, you know, this job that I'm in today certainly is something I would never have imagined in my life, never mind 2019 and early 2020.

And when the president called me and asked me to be his labor secretary, you know, I left a job that I love, being mayor of Boston, to serve not just the president but the American people. So I enjoy-- I love my job, and I like my job. And we'll see what happens in the future.

BRIAN SOZZI: All right, we always enjoy talking to you on the jobs day. US Labor Secretary Marty Walsh, good to see you. Stay warm out there. We'll talk to you soon.

MARTY WALSH: Thank you.