The January US jobs report is set to be released on Friday, February 2. One thing investors will be watching for is the impact from recent layoffs. Lakshman Achuthan, Co-Founder of Economic Cycle Research Institute, joins Yahoo Finance Live to discuss the impact of layoffs on the upcoming jobs report and what the labor landscape could look like in the coming months.

Achuthan notes that many "mom-and-pop" businesses struggled to hire in 2021 and 2022 and thus, despite inflation, are reluctant to lay off staff. Achuthan suggests that layoffs would be what the Federal Reserve will be paying attention to, noting "I think for the Fed, they actually want jobs growth down," as a buffer for rising inflation.

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Editor's note: This article was written by Eyek Ntekim

Video Transcript

BRAD SMITH: It's particularly interesting when you're out at brunch with friends on a Saturday and the tech layoffs or any of the waves of layoffs that we've seen come forward, they make it to the conversation. And we're talking about economics at that point. But we're also talking about whether or not that shows up in this print. And acknowledging it's a mid-month to mid-month, perhaps in the next print that we get, do we start to see these layoffs show up in them.

LAKSHMAN ACHUTHAN: Yeah, there's a lot of-- this is all the busyness under the surface of the water. I'm glad you brought up tech and then bigger companies. These companies have been letting go. They've been making the adjustment. It's the smaller kind of mom and pop employers who had a very, very difficult time in '21 and '22 hiring people. The big companies were able to hire people, no problem, really fast. And the smaller firms and companies weren't able to, so they're very reluctant to let people go.

And if you have like something like a GDP print, which again, is a headline number, not really what's going on underneath come in stronger like it did just last week, the mom and pop companies are going to be saying, hey, let me try to hang on. I'll reduce your hours, maybe you'll go part time, you know, that kind of stuff as a way to keep things going. I think for the Fed, they actually want jobs growth down, maybe even, dare I say, negative because they're trying to really nail it with this inflation that was a big mistake earlier.