Is the Economy Breaking? Wall Street Vet Robert Wolf on the Brutal Jobs Report

Thank you for everyone who is joining live on this pretty big news day, I mean, we are into a week of war, in the Middle East, and oil prices have surge 20% as Iran disrupts global shipping through the strait of our moves.

“It is one of the most critical checkpoints in the world at the same time the U.S. economy has been surprisingly resilient despite all this turmoil and the rising prices, some economists are calling it a Teflon economy.”

But today we woke up to brutal jobs, numbers, and we're going to break it all down on the show. So for me, the question on my mind is, how much can the U.S. economy really absorb when it's already on pretty shaky grounds stick with us because we're going to get questions from you, but I've got a very special guest on the show. So to help us break it all down, I've got Wall Street Titan Robert Wolfe. He's the former chairman and CEO of UBS Americas and he served as one of President Obama's top economic advisors during the financial crisis and recovery.

He is not the only politician that Robert has advised, but we'll get into all of that and more. Robert has been inside the room during historic moments, including that pivotal Lehman weekend in 2008. He really gets how decisions are actually made this.

He's going to tell us what powerful people actually say behind closed doors and what they're thinking when they make decisions that impact all of our lives.

Robert, thanks for coming on the show, long overdue. I know, thanks for having me on. I love you showing. I'm glad to be on today, although today probably isn't going to be the easiest day for those who are watching and listening.

“I know the text message from you this morning, brutal jobs report. I mean, what did you make of these numbers?”

Yesterday, I was thinking, well, economists were predicting as many as 70,000 new jobs. What happened?

Well, let's just say, brutal, I'm being nice by using that word. So we were expecting 50 to 70,000. It came in minus 90,000. Yeah. And so much, much different than expected. Unemployment went up to 4.4%.

“One of the biggest things that really no one's talking about is the labor participation rate. That's the number of people actually that are looking for jobs that are currently looking for jobs in the jobs market went to a low of 62%.”

And really, Tara, what that says is people are discouraged. They're actually stopping looking for jobs. And so just a brutal day for job seekers. And we saw unemployment from minorities, almost near double what unemployment are for white working Americans. Yeah. The unemployment rate went up from 4.3% to 4.4%. So it's just been really slow in sluggish. Is this a sign that companies are just like, they feel stalled. They can't. They're in a holding pattern. What do we supposed to make of this? Because the White House is national economic council.

And has it is blaming it on poor weather, in parts of the country, and worker strikes on the west coast. There were those nurse strikes and just methodological methodological changes at the federal agency that actually produces this data. Do you believe him? So he needs back in this.

There's always some cyclical clarity as we go into year and with weather. And we did have strikes in the healthcare space.

But the facts matter. And so let's just look at reality. In January, we actually had all of 2025 jobs revised down by 580,000. That means in all of 2025 we gained about 180,000 jobs, which is roughly about 15,000 average workers per month. That's horrible. What's even more important is since May of 2025, we've actually lost jobs. So this idea that we can only blame it on the weather or some sort of strike is just total BS.

We're going to talk about the Iran of it all. But you know, we keep hearing this phrase. It's low higher low fire economy. What does that actually mean in practice?

“Yeah. So that's kind of, I think if you listen to either squat box this morning or Fox business, they keep using that phrase. Mainly it's kind of, you know, I have used the term that we're in a job session.”

Some people are using this low higher low fire economy. What it means is companies are neither hiring nor laying off people.

So we're in this just stagnant environment, which the numbers show roughly, you know, 15,000 a month of jobs.

And I think that what it's telling us is people are nervous about, you know, geopolitical risk. They're also now deciding, you know, how much does AI artificial intelligence impact their productivity impact their efficiency.

“One thing I want to bring up as Tara's last week, Jack Dorsey, who is the founder and CEO of Block, made an announcement that he was going to reduce head count by 40% from 10,000.”

The stock went on fire. I'm telling you every executive in the country big and small is looking at what happened on that announcement. And so yeah, I think like I said, I would call it a job session because I think we're going to actually start losing jobs like we've shown since May of 2025.

Yeah, and the job growth that we have seen because last, the last job support in January was actually really great for over a hundred thousand jobs.

But they were mostly in the healthcare industry and that's that seems to be where all the job growth is, is that sustainable long term. It's not sustainable at all actually healthcare jobs went down by 30,000 last month, but that's probably because of the strike. I would say one of the most important sectors we need to look at is manufacturing. The president keeps touting all this new capex that's coming construction and factories. The truth is we had a manufacturing recession in 2025. We lost about a hundred thousand jobs and we have not seen that come back.

We actually have lost manufacturing jobs back to back months in January, February. And so, you know, I would just say to myself that, you know, because of geopolitical risk, because of the tariff situation that we'll talk about, you know, I think the tariffs had one of the most major impacts on the job market. In 2025, you know, I called the new and I chatted about it offline, but I called liberation day was more like the game of thrones red wedding. I thought it was one of the most most unforced errors I've ever seen at the intersection of public policy and finance. There's no reason that we do across the board tariffs.

“You know, we call use that example why we tariffing coffee or bananas when actually we just import those. So I think we've made some real mistakes in the past year. And then I think we've done some some smart things as well.”

Yeah, it's really ironic that the blue collar industries that Trump had promised to help seem to have had a really bad month. I mean, unemployment fell by 12,000 in manufacturing last month alone 11,000 in construction mining and logging. That includes oil and gas sector. They cut 2,000 jobs. What do you what do you make of all this? Is this because of the tariff? I mean, what what's going on here? Well, I think there's a bunch of things that the tariffs have definitely changed construction right, you know, if you look at this apply chain, if you look at the lumber we get from Canada that impacted it.

Look at the auto sector. We had a complete reversal of electric cars, which you know was supposed to be the boom and now it's become for the most part the bust. And so we've just had a lot of changes small businesses. You know, they're impacted the most by tariffs because literally they're not sure if they can pass their products onto the consumer or not. In this idea that foreign companies and foreign countries paid for the tariff is just complete nonsense. I mean, you know, I'm on Fox and I've been arguing this since April the tariff is paid by the importer.

We just show that 92% of the importers are located in the US. So they're either eating the tariff or passing it to the consumer. And so one way or the other, the US is being hurt by that. The thing that I'm thinking about right now is that since it does seem that our economy is on shaky ground with this slower hiring rate. How are we going to be able to handle an external shock like a wardrobe and oil spike?

This war is much different because of the energy shock and you mentioned the straight arm moves. It's not about how much oil output Iran does. Actually, they only output about 2% of oil production. So it's not that they're huge. Maybe it's 3%.

“It's that the straight of her moves actually does about 20% of all shipping. So the large tankers go through the straight of her moves. And so right now, it's pretty much as you mentioned, it's paralyzed, it's choked off.”

You can only imagine that 80% of those ships go to Asia, which is a large amount to China and India. And so it's not the idea that whereas concerned about only the shipping lanes, but what happens Tara is when you shut down shipping lanes, then all of a sudden the producers actually start losing their capability to keep storing oil, we're actually would be shipped. They stopped drilling. The reason we're seeing this spike is because even you heard this morning, the calories are saying, hey, and I'm not predicting this, but they said we could see oil go to 130 to 150 because we actually have no way to store it.

Now understand the calories in the Iranians have a little more of a relationship than most of other Middle East countries.

So I would, I'm not sure I would take that at face value, but with that being said, it's a scary moment. If this war is prolonged, you know, pass the possible 60 days that this administration has been talking about. Would oil, if it were to reach like those numbers 120 135 would that trigger a recession? Well, I would hate to say that energy alone will trigger a recession certainly it will impact spending. You know, one of the things that President Trump has been most proud about is gas prices. He has touted that it's under $2 a gallon. I mean, right now we're seeing the average at 330.

So that has spiked dramatically energy prices in the past month or up 35%. So there's no question if you look at gas and you look at oil and then if you add electricity costs because of AI and data centers, which is up about 10%. It's definitely going to hit the pocketbook of hardworking Americans and considering where consumer driven country about 70% of our GDP is consumer driven. Then yeah, it's going to impact our spending. So if you take what's happened in jobs and then you take what's happened in consumer spending possibilities.

“Yeah, I think you'll start hearing people talk about recession. My bigger concern and I'll only put this in a 10% probability. So it's low.”

I mean, we could have stagflation, which, you know, I've been in finance for 40 plus years. I've never seen so that's that's the, that's the, you know, the worst of all possibilities.

Can you explain that for everyone who's never heard that term before? Yeah, stagflation is like the intersection of a recession and inflation. It's when inflation's going up in prices. So whether it's groceries or energy prices and at the same time, we have slow growth and low jobs. And so it is the worst of the two bookends imaginable. It kind of looks like we're there already. Am I wrong, does it? I don't think you can, you know, predict what's happened in a one week period. You know, this isn't a black swan event, right? It's a geopolitical event that will end. So this is, so my view is, listen, if it ends, you know, and then within the next 60 days, we can reverse a lot of, you know, these trends that we're seeing.

I don't know about the jobs market, but certainly with respect to energy, and I know we're going to talk about other cycles we've seen, but there, there's a lot of ways to positively impact energy, whether it's with, you know, strategic reserves or opact doing something differently. So there's other alternatives. I don't know, we'll be discussing.

“Yeah, I mean, but hasn't the US really depleted a lot of its own reserves at this point because of the war in Ukraine?”

No, we are incredibly energy independent. We are, we have a record number of 13 million barrels a day of crude oil, 20 million barrels a day if you look at all types of energy that we're producing.

You know, we're, we're the largest, but we're just one of many large players. So what happens in Russia's impacts us actually, I saw today that the Treasury Secretary approved Russia oil going to India, even though that there were sanctioned because of what's happening in the Persian Gulf. So, you know, we're going to read and see things that we haven't seen, but, you know, that's what we have to do.

We're going to have to be dynamic as a country. So, when Russia's actually benefiting from all of this, absolutely benefiting.

Go figure. By the way, President Trump was asked about the rising gas prices by CNN's Dana Bassis morning and he said, "That's all right. It'll be short term. It'll go down very quickly." And then when asked about the straight of removes, he said he's, quote, " Already figured it out, but did not give any more help." So, let me just make one comment. And I don't want it to be, you know, I'm not here to tell you where I agree or disagree with Trump, although, you know, happy to go there as well. But I am completely opposed of this idea that we're going to put Navy ships through the straight of her moose to actually help, you know,

Middle East ships get to Asia. I think the idea that we would put our military and harms way to help transport ships that are mainly going to China makes no sense.

I also don't think that we should be the ones doing political risk insurance as well. These are, you know, one to two billion dollar types of ships.

“I'm on the other side of those insights that the president has possibly put forward. I don't think they'll come to fruition, but I don't think that is the best way to solve this.”

Okay, so Jennifer, who is watching us live on Sub-Sack wants to know what you see for interest rates? Well, listen, I'm probably the other side of where the Fed has been. I am more concerned about jobs than I am about inflation until this week. I also have been of the view that in a post-COVID world. I think the Fed being at two to two and a half percent is the inflation rate is off. I actually think it should have moved in a post-COVID world. We're inflation skyrocketed because of literally a black swan event.

It's something that's happened never before, where the entire globe shut down. So I think it should have moved to three percent. So I actually think the Fed should be looking to cut rates. I actually would tell you they should probably cut three to four times. In 26, I'm at the high end. They cut 75 basis points, you know, throughout 25. So I think they felt they did enough. My gut tells me they're going to stay and do nothing for the foreseeable future, mainly because, you know, although jobs feel somewhat stagnant.

“You know, we're still low unemployment at, you know, 434 and I think that with the possibility of inflation, producer prices came in a little hotter than expected. My gut tells me they'll probably just stand still.”

Yeah, Tyler from Substack is asking how this effect trump in the midterms. I think I can help with that. This can't be great. I mean, gas prices affordability. They are all tied together, even the perception that, you know, obviously I think there's a writer's pull that just came out that said that. Well, I'll get you the exact figure. How people feel about his handling of the economy right now. And I think it was in the 30% approve, which is underwater. Yeah, only 35% approve of the president's handling of the economy. So it really shows someone happiness. And then when you couple it with a war.

Even temporary rising gas prices uncertainty geopolitical shock. I can't imagine the president doing well. And obviously there's reporting that his team is scrambling to try to contain the gap.

If I can just add to that one.

“I think his comments when he's on the stump at affordability is a hoax is just ridiculous.”

I think it's something frankly. I think it's helping. And I kind of know that all too well because, you know, when I was as a surrogate for president Biden and we tried to make it like Bidenomics was doing well. You know that didn't work either. So the Americans are smart. Americans are smart. They understand, you know, what's really happening because it's pocket book issues. And the one thing I'll say is that, you know, Americans feel like the American dream is, you know, slipping away.

Number two, we have the lowest amount on record of first time buyers for home ownership at 21% of new homes of homes being bought.

“And then number three, the average income from new home buyers used to be about 85,000. It's now 125,000.”

So people feel like this idea that I'm going to be able to, you know, afford health care and, you know, afford education and buy a house. It feels like it's slipping away and it's been happening. It's not just this administration. It's been happening for a while and we need to change that. Yeah, I know, it is, um, they're not in a great position right now. I do want to go back, though, to your time during the Obama administration and how you dealt with oil shocks in the past. And how does this moment feel similar? I don't think it's similar. So, so during the Obama administration from 2008 to 2016, we had a lot of oil peaks and oil valleys, my role as an economic advisor to the president really started with the financial crisis.

And, you know, I was one of the executives when I was running UBS at the time at that two big to fail weekend, Lehman weekend, that led to the global recession. So, 2008 through 10, we were just dealing with one crisis after another. Then all of a sudden demand surged and that also actually coincided with the hour of spring in the Middle East. And that caused energy shocks in the system throughout 2011 and 12. And then all of a sudden, we had some good fortune and good luck that fracking proliferated and all of a sudden, we had too much energy. And in 2015 and 16, it went the other way where we had so much energy energy crisis was getting, we're getting smoked.

You know, the one thing I could say is over that eight-year period, the under President Obama, we went from an energy importer and was only producing, you know, four to five million barrels a day to becoming the energy independent by 2016, where we were producing north of 10 million barrels a day.

“And so, you know, like I said, we had peaks and valleys, but we definitely had shocks. I mean, you know, if you want to discuss Libya, that's probably the closest example to today.”

I don't know if something you want to discuss. Yeah, I know, I do want to know how they prevented that from becoming a sustained crisis because what the prices were at $125 a barrel in 2011. So let me just start on Libya because I think it is somewhat similar and somewhat completely different.

First, I would say where it was similar, and this is hard for me to say, but this is probably one of President Obama's biggest mistakes.

“When he alongside with NATO in 2011 led to the oosting of more margadafi, that caused incredible civil unrest after that.”

And we're still living with that today. So one, the idea that we, you know, took out a leader, but didn't really understand what regime change meant and how it would happen. And didn't have a good plan for day two, you know, it feels like some similarities today. So you think it would ultimately be a mistake? Well, it was definitely a mistake with Obama then. It's too, you know, I would say it's too early to tell whether it's a mistake today.

I mean, certainly am I glad that the, that the eye at toll is gone, the answer is yes.

But let me tell you where it's very different with respect to energy and we did see prices search to 125 a barrel. So back then, actually similar to Iran, Libya was doing like 2% of the output. But the other o-pack nations weren't really, weren't really impacted in Saudi who was the, the glide that the time actually helped with excess capacity. Number two, there was no issues with the shipping lane. So it was really just contained to Libya, didn't impact any of the Persian Gulf.

And then the other thing is we had what was called at the time.

So we were able to absorb that shock by the US working with their allies, O-pack actually working together.

And so Libya really became this one off. Very different today where we're possibly thinking about, you know, the, the inability of 20% of the shipping lanes, you know, literally being paralyzed. So just a night and day difference. Yeah, I did have a huge impact. So I guess, in a way, even though we are the biggest producer of oil, we are vulnerable today, despite the fact. You know, that we can, I mean global commodities are bigger than any one nation.

We found that, you know, wherever geopolitical risk hits a commodity, we found that with agriculture during, you know, the beginnings of Ukraine and Russia. And, you know, we're seeing that obviously today with energy.

“Jennifer, sorry, excuse me, Doug, on sub-sac asks, are you in the camp that Kevin Worsh will cut rates to play Kate Trump irrespective of the data?”

So I'm a fan of Kevin Worsh. I worked with him peripherally when I was running UBS and he was at the Treasury during the Lehman crisis. I think Kevin is a really smart guy and I think he's an independent thinker. I would hope that he's going to stay independent and I believe he will. I would say he's a little more of an inflation hawk than than most people that was being considered for the Treasury Secretary Federal Reserve under President Trump.

President Trump, so it was, I think a great pick, I think it was a right pick and I hope he stays independent. But let's recall, it's still a vote of 12. So to really move rates, it's not just Kevin Worsh alone. I mean, you need a majority to vote. And what do you think of the board right now?

“I mean, is that something that you think they're going to be?”

Like I said, I think they're going to stay and look at the data. I think there'll be, you outliers either there, you know, one way or the other, but I think for the most part, they're going to look at the data and the data has been volatile. And I think it probably forces them to hold off. Again, I'd be on the other side of that.

So political calmness Victoria Guida, she wrote that Trump is lucky to have a Teflon economy. He keeps absorbing shocks and you agree with that description of a Teflon economy under President. Well, I would agree. He sometimes the Teflon man, but I would totally disagree with her statement that we're in this Teflon economy. I would say we're in the case shape economy.

I would view it completely different differently. One, this started during COVID where you have the haves and the haves not the haves doing well, the top 10%. The haves not the middle income and lower income doing worse. We're seeing that again proliferate, you know, not to the same extent during COVID, but definitely we're feeling it. I used the 401k example, you know, I say this, you know, part jokingly, but you know, Birkin bags had their, you know, literally best retail sales ever and work in bags, which is the Walmart 78 dollar one had their best two.

So we can see that the two book ends. It's a tail economy is now a true. So it's definitely case shaped, um, you look at housing, you look at groceries, we're seeing that impact.

But here's what I would say, and this is where hopefully for you viewers, they, they understand where I'm getting.

The stock market is not an economic gauge. The stock market is not an economic gauge. What about the GDP, though?

“I think it's important. And this is why people say how well Trump's doing.”

Yeah. 90% of the stock market is owned by the top 20% wealthiest people, maybe even the top 10%. 50% owned by the top one. The bottom 50% of our country in income, own around 1% of the stock market. So the idea that everyone is benefiting from this stock market and it's a gauge of the economy is just not accurate.

And when I was advising President Obama, I always used to say, don't look at the stock market as a gauge.

And by the way, you would never see his cons people show stock market signs, even though they performed very well.

You were going to mention GDP, I'm sorry.

“Yeah, I wanted to ask about that because it did grow 2.2% this year. Should we be looking at that?”

Well, 2.2 is in anything to really be cherry about. I mean, you know, President Trump had an interview with Larry Cudlow on Fox. And he told us it was going to 15% which is complete nonsense, obviously. Right. Listen, I think, you know, we need to get it 3.4% to have the type of growth we need.

And hopefully we do that through wages.

And then obviously higher wages than the consumers able to spend more. I'm a little nervous about growth. I mean, you know, if the jobs market stays stagnant and the labor participation stays stagnant, and we've had a complete reversal on immigration, which is a big part of the jobs and growth economy. You know, I'm a little nervous.

And certainly we saw less than 2% in the fourth quarter. But we could, I don't know if I would blame that on the shutdown, but it's definitely impacted it. Yeah.

“What's the single biggest economic risk American should be worried about or paying attention to over the next six months?”

I mean, geopolitical is the biggest risk we have right now because geopolitical risk actually paralyzes companies. Most of the larger companies who hire a global companies, you know, very few companies are domestic only. And so I think geopolitical risk is front and center. I also think AI is, you know, certainly, you know, front and center on when it comes to jobs, when it comes to capital expenditure, when it comes to the stock market. You know, if not because if the war wasn't started in the last week, I probably would have said AI.

Yeah. Doug on some sack asks, what should investors be watching for if there are any signs that the Fed is getting inflation where he's wrong? You know, they look at PCI more than they look at CPI. So they look at personal consumption more than they look at the consumer price index. Personal consumption was a little hot in the last month.

CPI wasn't.

“So my guess is that's why all the sudden the futures market had them, you know, holding off versus an interest rate cut.”

Listen, inflation still around 3%. Their targets two to and a half. So I think they're going to struggle in my opinion to find the balance between a stagnated jobs market. And inflation that I actually think is low enough to cut rates, but my gut tells me by their data and by their goal to be at two to and a half they probably won't. I know you mentioned that Jack Dorsey cut a bunch of jobs because of AI, but when will we really see whether or not AI is going to have an lasting impact on employment?

Well, one, we are going to see it because we know that AI is enhancing productivity and efficiency. We just know that for a fact. I think the impact of AI we won't know for a few years mainly because the capital expenditures for AI is so ginormous.

That it's hard to assess whether these companies who are talking about spending 200, 300, 400, 500 billion a year actually is going to be able to continue that.

We've already seen some of the companies decided they're going to actually have to shed a shed employment. They're going to have to slow down cap X. We see some of this, you know, circular procurement where Nvidia gives open AI and open AI gives this and it just keeps going in a circle. Someone's going to catch that hot potato and not want it. So I will tell you they'll be some winners, but there'll be some losers too, and so everyone's so excited about AI, but my gut tells me that if you see the shocks like this on energy prices and also they're being forced to start paying for their own electricity.

And you know the cap X, I think we'll start impacting their earnings and you know you may see it slow down a little more than everyone thinks. Robert, thank you so much for joining the show. We went five minutes over, but we had so many questions from the audience everyone wants to know your insight and knowledge about what to expect in this crazy day. Hopefully the next report will be better. I mean, that's all we can hope for, but what do you think you think the next report will improve or are we going to see more of the same decline in the future?

I think there's going to be a nervousness, you know, I am a little less.

And who's right now about the economy, you know, so I'm probably on the other side of that, but I hope I'm wrong. On that side note. Anything to be excited, anything to look forward to.

“Any positive thoughts, I believe our audience with.”

Yeah, I'm excited for my Celtics and I think my red socks are going to have a good season and I would tell everyone. Screw RFK because Duncan donates is the best coffee. That's a that's a. Duncan donates is good coffee actually hard to come back. Yeah, the idea that he's going after Duncan donates.

Oh, my God.

We were getting some power.

We really, we're going back. We loved it. Thank you. Oh, well, Jennifer Anderson said fantastic. Guess Alex.

Alex, um, a lacron. Alarcon said great. Us. Robert Wolf is so knowledgeable.

“Everyone is very grateful to have you on the show.”

So thanks so much.

We hope to have you back soon.

Hopefully not only on the, the human gloom days. We don't want you to be. What do they use to call Alive? Um, they'll she the ball headed, uh, the ball headed messenger of doom. [laughs]

It's been you've got better hair, but you know. Thank you. All great. Thanks. [laughs]

All right. Talk to you soon. Thanks everybody for tuning in.

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