This Changes EVERYTHING for the Fed: Jobs Shock

all right boys and girls TMF is going to

be printing some dollars again for us

here some more dollar Hollow cuz we just

got the payrolls numbers by the way

before I go through that mck did you get

back all those bundle emails because I

got to raise the prices oh yeah okay

McKay says you got the bundled emails

done uh but uh we we haven't raised the

prices yet because we got to go to

podcast and it's like 5:37 our time but

anyway so you have another maybe couple

hours uh okay and you can email us at

staff ofme kevin.com if you have any

last minute questions for financial

advice or the coures on building weth so

what happened folks the big news is

obviously the jobs numbers came out

unemployment rate actually goes up. 3%

from 3.5 surveyed 3.5 prior people

weren't expecting this goes up to

3.8 that is a 30 basis point increase

while average hourly earnings were

expected to come in at. 3 actually came

in low at 0. 2 in other words the

opposite of a wage price spiral more

unemployment as WI the participation

number was moved up I'll explain that in

a moment but at the same time we went

down from a prior read of 4% uh wage

inflation which would be like 4.8% per

year above the 3% goal went down to 3%

in the survey which would be 3.6% per

year also slightly above 3% inflation

goal right uh the inflation goal of 3%

is 3% for wages which is supposed to

bring in CPI at 2% now and then it

actually came in at 0.2 which annualized

out to

2.4% which is below the 3% Target so

actually very good number there on

average hourly earnings that means

average hourly ear earnings are still

positive but nowhere near that wage

price spiral level we also did get a

revision down in the prior read

obviously in macroeconomic turns

especially with lagging data these

numbers always get Revis down but we got

our prior read from 187 moved down to

157 that's 20,000 negative this came in

177,000 hot though uh instead of 170 we

came in at 187 but because the net

number between those two months is

negative and we expect these numbers to

move negative and the unemployment rate

moved up the market is actually very

happy about this again the reason the

unemployment rate moved up is because

more people were deemed to be

participating in the economy obviously

all these numbers are just a fancy

estimate of what's actually going on and

there's some degree of variability and

uh information that isn't accurate about

it but the prior read was a

62.6% read for labor force participation

that is exactly what the survey was we

actually ended up getting

62.8% so more people participating in

the economy probably because you have to

to be able to survive but that's also

kind of the point the FED wants less

people just sitting on a stack of cash

retired not working uh then you have the

average weekly hours of all employees

usually when this number plummets a lot

it's it's kind of kind of a red flag

that okay businesses are like yeah n no

y'all don't need to work that hard cuz

things are slowing down that number

actually went up so every read of this

to the extent that you could sort of

trust these numbers knowing they're

going to get revised it's all good news

like wage pressures down job growth

slightly down but not like massively

negative the amount of hours people

working and the number of people working

up all of those things are literally

what the FED wants to p that's what JP

said we need the job numbers to keep

coming in in this direction if they

don't then we are prepared to raise

rates more as a result because the

numbers are continuing to come in the

way we expect uh we are now basically at

a 90% chance of a pause for the

September meeting coming up on September

20th mark your calendar for that mark

your calendar for I think it's September

13th so in 12 days for CPI uh day and uh

then also mark your calendar for

November first which is the uh meeting

that just had its odds of a raid hike

decreased by about uh another 10% so I

think we're down to like 38% now chance

of actually getting a hike in November

just because the data continues to show

that dang it may have taken longer but

maybe inflation was the t- word oh we

not even going to say it uh of course

you know no nobody believes it uh nobody

believes it until it's going to happen

and I actually think that uh you know

shout out to Christine lag she had a

really good line about this she said

look

inflation is understood in the rearview

mirror but it's felt forward in other

words you don't know what's coming you

feel it but looking in the river mirror

we look at inflation we're like oh yeah

makes sense we printed way too much

money we had high inflation for a period

of time thereafter and then it would

somewhat make sense that things

normalize thereafter but that does not

change the bare thesis that the inverted

yield curve signals and recession coming

whether it's shallow or deep or that

corporate profits well in many regards

are flat or negative year over here or

that maybe the lagging unemployment

numbers and the true pain of

unemployment is still yet to come so let

me know what you think down below but

the numbers we got today are definitely

good if you are on Side Lower treasury

yields yay TMF or um long stocks good

luck out there thanks for watching and

uh yeah going to a podcast by the way if

you want to watch it I don't know if

it's gonna be live I think so it's it

might be live you can watch me on Tim

pool's podcast so we'll see how that

goes uh that should be really fun but uh

come add some support in the comments

see you there goodbye