DISASTER: Jobs Data Release & Wage-Price Spiral

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okay folks we just got the unemployment

data we were expecting 318 000 jobs we

came in at 390 000 jobs so that's a bead

it's down from the prior of 428

unemployment rate did take up to 3.6

percent with the average hourly month

over month earnings this is a big one

okay month over month earnings when

those take up too much we start worrying

about a wage price spiral right well we

came in with an expectation of 0.4 which

would be 4.8 percent annualized anything

under 5

is ideal right now we ended up getting

0.3 that's 3.6 percent annualized really

really good that is this is what we want

to see we want to see that wage growth

start slowing down a little bit so the

fed can go

okay good no wage price spiral no need

to paul volcker the economy things are

slowly chilling out a little bit wages

still up 5.2 percent year over year and

we've got the labor force participation

rate taking up a 0.1

which is a good uh 7.4 percent of people

teleworked still that's down from seven

point seven percent in the prior month

and down from like thirty percent during

the pandemic which is kind of crazy

still one point eight million people

reporting that they're unable to work

because their employer closed or lost a

business due to the pandemic it's also

interesting that they're still reporting

that

going to a little bit of the survey in

terms of where these jobs actually came

from and then i want to touch on the adp

report from yesterday as well we have

employment increased 36 000 in

government education construction jobs

up 36 a thousand

we have

an increase in transportation

warehousing of 47 000 professional

business services up 75 000 leisure

hospitality up 84 000 non-farm payroll

in total 390 increase so still seeing

that hiring healthcare up 20 000

mining up 18 000 not talking about

crypto mining speaking of which new york

is now thinking about pausing any crypto

mining for two years for new permits for

companies using

uh non-renewable energy so any kind of

coal-fired uh you know bitcoin usage

sorry two years no new mining not that i

think a lot of companies are starting a

lot of new mining companies right now

anyway vtc dropping as soon as the tesla

news came out this morning on hiring and

a hiring freeze we saw btc drop right

under 29k anyway employment in retail

trade declined by 61 000 in may but is

still 159 000 above its february level

kind of interesting job losses over the

month job losses occurred in general

merchandise stores minus 33 000 within

that clothing and clothing accessories

down 9

000 building materials and garden supply

stores down 7 000 so that's kind of

where you're starting to see those

cracks apparel home improvement that's

not that much of a surprise although

lulu's still killing it i think the pain

is still ahead for them they just had an

excellent earnings report okay so adp

report from yesterday i want to touch on

the adp report this gives us a little

bit of an idea of where we're getting

hit hardest in some of the jobs

losses we have small businesses in the

adp report losing 91 000 jobs mid-sized

this is usually 20 to 50 plus growing 97

000 jobs and large companies growing 122

000 jobs that's the adp estimate of the

unemployment report but it's very

interesting that it's small businesses

what we're getting highlighted here that

small businesses are having the largest

amount of cuts and it's not uncommon for

small businesses to start seeing

recessionary environments much sooner

back in december around december you

know we started seeing the market kind

of tick down december 6th then on by

december 20th or so i started thinking

to myself oh man it's probably time to

really start thinking about saving cash

as a business owner and i think small

businesses are sometimes your your early

sort of warning signs of oh cuts to come

right and now of course

we're seeing uh coinbase freeze hiring

refunding people for some of the hiring

that they've done like hey sorry we gave

you a job offer we're taking that back

tesla planning to cut ten percent of its

workforce uh we've got some definite

cracks in the economy but i'll tell you

one of them is not the average hourly

earnings rate going to the moon thank

goodness because if that were happening

you'd have to dump everything because

we'd be getting paul volcker in fact

remember

we talked about this a lot of course and

not only the programs i'm building your

wealth link down below but of course

here on the channel

back in january we were concerned about

a wage price spiral we had wages going

up to the tune of almost nine percent

that was greater than the inflation rate

that was a really big danger that ended

up getting revised down to like six and

a half percent a month later and

february march and all the subsequent

data showed those declining uh wages or

rather that declining wage growth on a

month-over-month basis which is very

very important we do not want a wage

price spiral even jerome powell has

bluntly told us a wage price spiral

would be absolutely unacceptable like if

there's one thing where they just hard

stop it's wage price spiral so so so bad

in case you don't know what that basis

basically is wages go up at a rate

that's higher than the level of

inflation then you actually self-fulfill

more inflation and you potentially

destroy an entire currency very very bad

i think turkey just reported their

annualized inflation rate is like over

74

that is the kind of currency that ends

up dying and it could lead to a

fundamental change at

an entire government as well

although we probably need some

fundamental change at our government too

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