Barry Ritholtz calls January’s 130,000 job gain ‘mediocre’ — and says a Supreme Court tariff ruling is what could spark an ‘immense rally.' Here's why

Ritholtz, who also hosts the finance podcast Masters in Business on Bloomberg Radio, writes for his finance website The Big Picture and, most recently, authored the book How Not to Invest: The Ideas, Numbers and Behaviors That Destroy Wealth — and How to Avoid Them, added that focusing on the 130,000 new jobs buries the larger story.

That, he noted, is how the Bureau of Labor Statistics (BLS) chopped the 2025 employment gains by nearly 70%, revising them down from 584,000 to 181,000. “Some of it is deportation related. But whatever it is, last year was pretty mediocre for hiring.”

In addition, the 130,000 jobs created in January — while an improvement compared to the 2025 stats — does, as Ritholtz noted, mark one of the lower monthly gains in the last 15 years. Given the 2025 monthly job numbers peaked at 108,000 last April, the 130,000 marks a very modest step up. As well, the unemployment rate dipped a hair from 4.4 to 4.3, while hourly earnings increased year-over-year by 3.7%.

“You need to have the broader context,” Ritholtz said. “I called [the] report ‘the confirmation bias’ because you can find whatever you want … Something bullish, here it is. You want to find something bearish, here it is. Again, almost nothing is black and white.”

Forecasting America’s financial future

The uneven pace of job growth so far during President Trump’s second term has added to broader uncertainty about the economic outlook.

“There were a lot of issues last year,” Ritholtz explained, though he added that he doesn’t agree that 2.5%-3% inflation is too concerning. “I think other people think it's much more problematic because of the silly 2% target. But there were a lot of issues last year and it's complicated.”

He pointed to the fact that the economy is still expanding, the stock market is reaching all-time highs and that “it's hard to become too bearish in the light of that.”

But, he warned, “you have to have your eyes open” to what the back half of the year could bring.

He puts the chance of a recession in the first half of the year at 25% to 30%, or “really unlikely,” saying that those chances could tick up to 35% to 40% in the second half.

“But as we've learned with this administration, you’ve really got to look at the policies that are announced,” he continued. “A giant trillion-dollar tax cut is very stimulating. A giant set of tariffs is inflationary and takes consumer spending to a not great level. And you've seen the consumer sentiment is pretty punk. So it's never black and white. It's always shades of gray.”

The Supreme Court strikes down Trump’s tariffs — what happens next?

A major question hanging over the economy was resolved Friday, when the Supreme Court struck down President Trump’s sweeping global tariffs in a 6–3 decision (2). The tariffs raked in an estimated $287 billion last year (3), while contributing to trade tensions with allies and coinciding with job losses in some sectors, including manufacturing (4), leaving U.S. households to absorb much of the price impact.

The ruling throws into doubt hundreds of billions of dollars in tariff collections and raises questions about potential refunds for importers, while President Trump has already signaled he will pursue alternative trade authorities.

Ritholtz had argued that a Supreme Court decision striking down the tariffs could help keep inflation in check while flowing hundreds of billions of dollars in tariff refunds back into the corporate sector. In fact, he noted that he invested in Walmart, Caterpillar, Ford, GM and other companies requesting tariff refunds following last November’s oral arguments regarding the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA), based on how “dubious” the court seemed of the government’s argument.