The Dividend Cafe - Wednesday - February 11, 2026

Episode Date: February 11, 2026

In this episode of Dividend Cafe, Brian Szytel provides an update on a mixed market day with little movement in the indices. The DOW dropped by 66 points, the S&P was flat, and the Nasdaq saw a slight decrease. Bond yields rose following a strong non-farm payroll report, which showed 130,000 new jobs against an expected 55,000, led by the healthcare sector. The unemployment rate also decreased to 4.3%, while hourly wages grew by 0.4% for January, totaling a 3.7% year-over-year increase. Labor force participation ticked up to 62.5%. Szytel addresses questions about inflation perceptions versus reported CPI, explaining the difference between disinflation and deflation. He concludes with a reminder that good news should be seen positively and notes market reactions to Federal Reserve rate expectations. 00:00 Introduction and Market Overview 00:27 Employment Report Insights 01:25 Labor Force Participation Trends 04:00 Inflation and Personal Experience 05:20 Conclusion and Final Thoughts Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome to the Dividing Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. Good evening and welcome back to Dividend Cafe. This is Brian Sightel with you on a bit of a down day. I'd call it really just mixed in the market and lackluster as far as the indices are concerned. We had the Dow that was down about 66 points. SMP was completely flat. Nasdaq was just margin. originally down by about 15 basis points. So stocks are pretty much unchanged. Bonds actually sold off today. You had yield to rise. Tenure was up three basis points, but across the entire yield curve, interest rates went up a little bit. And there's reason for that. Today we got a delayed non-farm payroll report from last week that was much better than expected. So good news. We got 130,000 new jobs when only about 55,000 were expected. And we got broad-based participation in that as well, the health care sector was probably the largest contributor to the numbers, but nonetheless,

it was a good read. And then the unemployment rate actually tick lower by 10th. We got 4.3% from 4.4.4. So good news on employment. Inside of that, you also had hourly wages that went up more than expected. We got a 0.4% increase for the month of January. That puts 3.7% year over year. So if you think about inflation being somewhere near 2.6 and hourly wages growing at 3.7, that's a positive thing for the economy, for the average consumer, for the country, frankly. And then lastly, we also look at the labor force participation rate. It actually did tick up a little bit, which is really a good sign. We talk about this for years, frankly, at this point.

But the labor force participation rate has just been abysmal, really, for since really the, I'd call it the early odds. since 2004 period of time, the last 20 years, it's been lower than it has been. So we've been in this sort of low 62% range. We're now at about 62.5. In the mid-90s for perspective, through the early 2000s, we were a lot closer to the 67% rate. And the difference in some of the changes are demographic-based. So there's baby boomers that are retiring coming out of labor force. So I guess that makes intuitive sense, although there's plenty of new generation folks

coming into labor force as well. The reality is two things. One, the influx of female employees has tapered off and has more normalized. They make up a larger percentage now, of course, but the growth rate has now normalized. And the second part to that is this sort of weird situation of really prime aged working males, 25 to 50 years old, that aren't working as much as they used to. And there's probably some societal and some broader topics to. be gleaned from why that is from a societal perspective. And I didn't want to use this dividend cafe to go into all of those things, but just to give you some context on this jobs number and the participation rate and what we're seeing in employment, it's mostly good. So those are

positive about the economy. We've seen good things on the growth side. We've seen positive earnings come out. And now we're seeing labor, which had been the weaker part, starting to look a little better as well. All those things are good. And my last comment was about them not being mutually exclusive to lowering inflation as well. More people working in a more productive and growing economy does not necessarily mean that inflation will go up because of those two things. And so the Phillips curve is indeed dead. And I think the new Fed president that's coming in, Kevin Warsh, knows that very well and understands it. And I think that'll be a good thing for some of the policies said on the monetary side. But that's my around the horn on the market and some of the employment numbers that we got today.

I do think it's somewhat surreal to think about for all that is good and bad about the economy. There's still more people employed now than in human history in this country. So we've got 159 million people working. It's still a good thing in my lifetime. That number is doubled. All things aside, that's quite a notion of success for this economic machine that the United States is. Questioning there today was about personal experience with, their inflation and what's actually being reported in the government numbers on CPI.

And is there funny math or why does it feel so different for this particular person at the grocery store versus what's being reported? The short answer is there's two reasons. CBI is more broad. So what people are used to paying for in the form of groceries, of gas, rent directly affects them. And they notice it a lot more. They also have an anchoring to what they used to pay, say, five or six years ago. And they know that what they're paying now is more. So I know, understand that. The reason is that there's a difference between disinflation and actually deflation. So when you have a ramp up in inflation, and that's what we saw in the 2022, we had that inflation right up near 8%. It's now come down to the mid-toes. That's true. That's called disinflation.

It's a slower rate of growth of inflation. And that's fine and good. But that doesn't change the fact that prices have gone up. That doesn't mean the prices are actually going lower. It just means the rate of growth has slowed down. And for most people that are spending X amount of dollars, on a gallon of milk today that we're used to spending a lower number five, six years ago, it doesn't necessarily help them to know that inflation is back in a normalized territory. And that doesn't mean those prices are going to come back down. I hope that helps in describing that dichotomy between those two things. But that's what I have for you around the horn today on Dividend Cafe.

Generally a pretty positive day overall in fundamentals. Markets were a bit of deer in headlights and didn't move much because of what happened in Fed futures that priced in a lower number of rate. cuts, and instead of June, it looks like it is July as far as that expectation. And so there's that back and forth between good news being treated as good news or good news being treated as, oh gosh, now rates are going to stay higher for longer. I'll always take the good news as good news. That's what I have for you today. Thank you for listening to Dividend Cafe. We'll be back with you tomorrow. Have a good evening.

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