September jobs report: Leisure and hospitality sector leads payroll gains

Yahoo Finance Live anchors discuss the sector breakdown of the September jobs report, with the leisure and hospitality sector adding 83,000 jobs and the trucking industry seeing jobs decline.

Video transcript

BRAD SMITH: And everyone, as we've been continuing to keep a close eye on the major averages, we are in the red across the board. With just over 30 minutes until the start of trade, about 30 minutes-- excuse me, 38 minutes until the start of trade, it seems here, as we're continuing to take a look at the major averages.

The Dow Jones Industrial Average down more than 1% right now. S&P 500 futures, that's also lower by more than 1.3%, nearly 1.4 there. And the NASDAQ futures are seeing that down 219 points. And the tech heavy average 1.9%.

And there's been a ton to continue to parse through here with the data as we're watching the major averages retract on this news. It really is, because we're in a good news is bad news type of scenario in terms of where this may shift the policy pathway. However, from our guests, and especially with Jennifer was laying out, this probably doesn't change too much within the Fed, but the markets still reacting heavily on this.

JULIE HYMAN: Yeah, it definitely is reacting heavily. And in fact, if you take a look at the YFi Interactive, that way we can take a look at the chart here. And you can see the decline in the futures when this number came out, and there's not much bouncing around here. So it's a pretty much straight line down.

And if you look at the futures, the Treasury futures, this drop means that yields are going higher. So it's exactly as you were describing, this perception that with this number coming in better than estimated, the Fed is still full speed ahead. I also just want to quickly check on what we're seeing in pre-market trading from a lot of the big biggies that we watch here.

So the numbers below are the pre-market trades. And we're seeing a lot of pain within tech. That's what we have seen consistently ever since we entered, not even before we entered this rate hiking cycle, and the perception that rates were going higher, it has been tech that's taken it the hardest.

Apple down 2.4% in pre-market trading. Amazon down 2%. Microsoft down 2%. You get the idea, folks. We are seeing a lot of weakness in those big cap tech stocks, Sozz.

BRIAN SOZZI: Yeah, you know, I think what Matt brought up was very interesting on corporate earnings, guys. Of course, we have to pay attention to the jobs report. This is a market I think still obviously very focused on what the Fed may or may not do next on rates, when do we get a pause. But very important what we heard from AMD and even Levi's last night, two household name companies amidst the slowdown in the economy, like we saw in the jobs report.

But two household name companies warning of really major slowdowns in their business. For AMD, which has just been a market darling going on five years under CEO Dr. Lisa Su, to come out here and miss on sales by over $1 billion, I mean, that is huge. It's just a huge warning and indictment on where the economy may be headed over the next few months.

And you have Levi's, of course, a slowdown in the US, but real weakness over in Europe as many countries over there, of course, battle with higher interest rates, inflation, and slowing economies of their own. And you put these two reports together and it's not a good look. It's not a good look for the markets.

BRAD SMITH: At a time, especially for AMD, where in the chip space there is so much movement that we're tracking, whether that be on where the demand is, but also where they're also seeing some of that investment into the broader space, especially here domestically. But all of this considered and kind of bringing it into the jobs equation, if you will, if we're looking across tech, tech has seen a swathe of some of the cuts, the employment cuts, the hiring freezes, even that have started to be instituted. And whether that's want to talk about fit tech this week, Peloton, and of course, Peloton has its own share of issues that it's been navigating through.

But for some of the other companies that have been looking across the broader employment spectrum to try and figure out where they need to mitigate some of their costs as they are the CEOs and the executives teams trying to plan for what their company looks like, what their balance sheet looks like in the face of an impending recession, that's exactly where it gets to the question of, all right, at what point have there been enough cuts?

And that's a serious question for once we actually get to that point and the detriment that those companies also incur where it relates to their consumers, whether that's business to business or business to end consumer in how their purchasing cycles may change too.

JULIE HYMAN: I just want to emphasize sector-wise what we saw in this jobs report, right. Because we anecdotally have been talking about a lot of job losses. You mentioned Peloton, large cap tech seems to be at least freezing hiring if not cutting back outright. And there you see the numbers. Leisure and hospitality, as Brad mentioned off the bat, was the biggest gain here, up 83,000.

Professional and business services, which tends to include a lot of those tech jobs, still saw gains of 46,000. So there, overall, you're still seeing gains, even if we keep hearing about these anecdotal situations. And I wanted to flag one more number that is getting a lot of attention from economists, from people who are watching this report closely, and that is in trucking.

So in transportation and warehousing broadly, there was a drop of 8,000 jobs. In truck transportation, down 11,000. So interesting to see that drop. Some of the losses that we're seeing are places that gained the most over the course of the pandemic. So some of this is a little bit of a giveback for that, but some of it could also be a harbinger of what's going on in the economy.