The Disastrous Jobs Report & Fed Impact.

all right we're expecting 225 for total

non-farm payrolls here we go we're

expecting 225 and an unemployment rate

of 3.4 average hourly earnings month

over month to be 0.3 come on man come in

soft okay we have 311 it's really hot

that's bad that's not what we wanted to

hear unemployment rate actually ticked

up though that's weird uh oh thank God

average hourly earnings point two oh

thank God oh it's a Saving Grace average

hourly earnings month over month came in

low at 0.2 thank God headline

unemployment number came in at 311 311

though that's almost a hundred thousand

jobs hot uh it's about 80 84 000 jobs

hot that's insane uh that's the total

change in non-farm payrolls comes in

really hot again at 311. you have the

change in private payrolls coming in at

a 265. the expectation was 215 that's

really hot you have the unemployment

rate actually ticked up to 3.6 from 3.4

I'm not sure what kind of funny math the

BLS is doing there we'll look at the

report average hourly earnings coming in

thank goodness thank goodness at 0.2

percent as opposed to point three the

last thing we'd need is is more pain

there uh we're just now getting the

revisions uh year over year average

hourly earnings come in at 4.6 versus

the expectation of 4.7 okay at least at

least no wage price spiral that's good

which now we've got uh labor force

participation rate takes up 0.1 that's

probably why the unemployment rate moved

uh now you do have a slight revision of

the prior data you are moving the 517

000 payrolls from January down to 504.

that's a nominal revision so nominal

revision so this is a I would say good

news and bad news report let's go to the

uh BLS labor report or jobs let's go

ahead and actually pull up the report

here but uh I would say let me see what

other revisions we've got coming in here

this is you've got again okay we're

changing manufacturing negative four

thousand the expectation was 10K uh so

you're seeing manufacturing payroll

suffer that is is definitely an

indication of a recession coming but

then again we've been talking about

indications of recession coming I mean

everything is pointing to recession

right now and this is why people are so

worried about the Federal Reserve

continuing to hike especially in the

face of Bank runs and potentially a

financial crisis that's the last thing

you want on this Market but anyway

unemployment rate uh again 3.6 that's up

from 3.4 and that average hourly

earnings report that's that's good no no

great news though on the revisions

basically still guiding high on the on

the prior uh uh January report which is

not fantastic but is what it is now uh

what we're also going to do is look at

what Wall Street is saying so uh let's

see here uh payroll gains were led by

Leisure and Hospitality retail trade

government Healthcare that's exactly

what you would expect

now you have a previous two months of

payrolls were revised down by thirty

four thousand that's the previous two

months I gave you the revision for the

previous one month but again that's very

very nominal

uh but that does uh that does slightly

rev at least it's a revision down right

so let's look at the bright side it's

revision down not a revision up right

now it does look like you're also seeing

treasury yields fall on this this very

interesting uh yep treasury yields

10-year treasury yield is now down 12

basis points okay this is enough for I

mean there is

there is entirely the possibility that

with the the if if we get a nominal CPI

report like this suggests there's

entirely the possibility that with the

financial stress that you're seeing in

the banking system now it is entirely

possible that the Federal Reserve

actually pauses and says oh oh we're

gonna just uh pause for a moment and

wait and see because maybe there

actually is a lag uh yeah okay two-year

treasury yield now down 16.4 basis

points again now you're actually

starting to see the recipe of what

recession feels like uh it it's actually

finally starting to happen where you're

starting to see uh you're still seeing

job gains again in that the Leisure

Hospitality stuff but that's

underemployed you're still below Trend

but if inflation goes away and now

you're worried about financial stability

that's bad uh that's now you're going

from the fear of inflation to the fear

of of an actual financial crisis all

right uh at the same time by the way I'm

gonna just uh sorry about that let me

going to keep up here what Wall Street

is saying okay I don't see a lot of

payroll declines in these reports lately

but remember payroll extremely a lagging

treasury yields dropping across the

entire curve uh it does look like you

have uh with a move of 36 bases with a

hike okay let's see here

I mean I I don't want to come across as

actually suggesting that like the

Market's really going to say oh the

fed's going to pause I'm just saying

there's a possibility when you when you

start getting no impetus of inflation

combined with this banking disaster

that's going on anyway total non-farm

payroll increased 311 000 edged up uh

the unemployment rate edged up to 3.6

again it's because participation rate

moved up 0.1 percent Hispanic

unemployment 5.3 that's an increase

you've got uh let's see here

unemployment rate for adult men 3.3 3.2

for women

okay black unemployment rate's the

highest at 5.7 Asians 3.4 whites 3.2 why

there's such a difference is is this is

something that hopefully goes away at

some point anyway the number of persons

uh jobless less than five weeks

increased 343

000. offsetting a decrease in the prior

month this is very interesting these are

new layoffs right here right less than

five weeks that means those are brand

new people who just got laid off and

that number decreased in the prior month

this is the pool this is the entire pool

of people who've been laid off less than

five weeks that just shot up by three

hundred forty thousand dollars so you

are seeing the pain in the labor market

when you actually look at the details

yes I understand the headline number is

going up but the headline number is only

going up because you still have severe

unemployment or underemployment in

sectors consider health care for example

let me let me just draw this so you

could understand this because sometimes

people don't understand it if this is

the trend of Health Care employment

going up right let me actually just draw

that if that's the trend of healthcare

employment going up because of the

pandemic we saw Health Care employment

rotate down and now we're kind of back

to those 2019 levels right if you kind

of draw like this you're back to those

2019 levels but where we should be still

represents a 900

000 job Gap just for health care that's

just health care and again the the

leading job gains here so far are

Leisure and Health Care uh Hospitality

retail right that makes sense okay let's

look at the actual details here

these individuals okay these are okay

what do we have here this is number of

persons employed part-time for economic

reasons at uh 4.1 was essentially

unchanged no news here number of people

not in the labor force Who currently

want a job unchanged 5.1 this is how you

get by the way Jerome Powell's a jolts

ratio right we've got about we just got

the joltz report that came in hot at

10.8 so we got 10.8 million job openings

and the people who want a job at at 5.1

that that puts you at a ratio of over

two right Jerome Powell wants that to be

in balance that one to one but it's just

weird because you're getting the layoffs

on on one side especially Tac right uh

and white collar it's kind of being

somewhat called The White Collar

recession but you're still getting

hiring like crazy look at this uh

notable job gains occurred Leisure

Hospitality retail trade government

Health Care employment declined and

transportation warehousing this is very

male dominant and these sectors are very

female dominant so Transportation

warehousing construction you're you're

probably 70 percent male the stat from

The Wall Street Journal Leisure

Hospitality that's over 60 percent women

so you can actually see more women going

back to work after the pandemic who

previously decided to stay home uh to

take care of children because they had

to because they didn't have child care

or whatever you know pandemic forces or

they retired from the health care

industry whatever a lot more people

potentially going back to work now going

back to work at higher wages especially

in this area here look at that 105 000

jobs in Leisure and Hospitality similar

to the average monthly gain of 91 000

over the past six months food and

service and drinking places at its 70

000 jobs employment continued to Trend

up in accommodation fourteen thousand

employment Leisure Hospitality look at

that you're still below your

pre-pandemic level by 410 000. so

remember I told you Healthcare 900 000

below Trend well over here this is not

even below Trent this is below

pre-pandemic levels so in other words

you're still 410 000 jobs short in

Leisure and Hospitality that doesn't

even consider that you usually have

Trend growth this is a disaster this is

a complete disaster then you have

employment in retail trade Rising by 50

000 in February merchandise retailers 39

000 again these are still under Trend

employment and professional and business

services continue to Trend up let me see

what else Wall Street is starting to say

here you can start to see some of the

labor market softness in the data number

of people who lost their jobs or

complete attempt work increased 223 000

number of people employed less than five

weeks 343 that's what we pointed out

dollar strength is touching session lows

that makes sense the dollar Falls when

yields fall another encouraging Point

here is the increase in the labor force

participation rate that take up

absolutely right only two out of 61

economists you can't listen to these

predictions at all man these predictions

are just you either either rigged or

just nobody nobody can predict stuff in

this market right now because it's such

a crap shoot but anyway it says only two

out of 61 economists predicted a 0.2

reading for that gain in average hourly

earnings that is the only piece of good

news today everything else is hell today

I I guarantee you that banking contagion

is an sh-9t show that is very very bad

especially with those unrealized losses

even at companies like JPMorgan now

don't get me wrong big Banks go through

much more of a stress testing than small

Banks but still only 2 out of 61

economists actually hit point two that's

insane uh yeah no but nobody knows what

the hell's going on anyway employment

okay Healthcare added 44k we still know

again we're 900k below Trend there

Construction Group uh 24 000 19 social

assistance Information Technology

there's your Tech look at that so so you

hear about all these popular Tech

layoffs right like Facebook or whatever

okay so the deployment report tells you

25 000 jobs were lost in in Tech right I

just want you to understand look at this

number here Leisure and Hospitality

added 105

000 in the same month you added four

times more jobs in Leisure and

Hospitality alone than you lost in Tech

so you hear about all these Tech layoffs

it's a drop in the bucket complete drop

in the bucket Transportation warehousing

down 22k 9000 in trucking and

transportation you've got uh let's see

here employment little change over here

average hourly earnings this is

fantastic point two percent year over

year four point six percent fantastic

and average work week for all employees

edged down that's good that's a that's a

sign of not overheating it's a sign that

pricing power is going away uh for for

wage earners but this is consistent with

what we're seeing in the leading data

with a leading data earnings calls folks

everybody gets mad we're gonna go back

to the reporter mode everybody gets mad

at me when I say it they're like no

Kevin the government reports I think

government reports are so lagging you

got to look at what companies are doing

Tyson Food on one hand bragging about

how they're able to raise prices last

year Tyson votes they sell frozen

chicken okay they're bragging about how

they can raise how much people they have

was what they were arguing about now

they're like oh yeah wages went up but

we can't raise prices anymore in fact we

had to do some massive abnormal

discounting of chicken because we didn't

think people would just stop buying

chicken but I guess people stopped

buying chicken yeah

not only that but Chipotle is finding it

easier to hire Starbucks finding it

easier to hire Target Costco all of

these companies are hiring less people

and focusing more on Walmart saying it

they're all focusing on autonomy and

efficiency and productivity

not on hiring more the hiring boom is is

not in Staples anymore yes it is still

in health care and Leisure and

Hospitality however it is easier to hire

there now and other things that you

don't actually capture in these sort of

reports is the removal of perks and

signing bonuses Healthcare used to give

people five to ten thousand dollars as a

signing bonus just to get people to sign

on to take a job that's over you don't

do those signing bonuses anymore because

you don't have to remember Tech how

everybody on Tick Tock used to brag

about all these perks that they had

working for their perky tech companies

folks what is this listen this the Wall

Street Journal literally has a title the

perk session is underway now when I

first read that I don't you can't blame

me but when I first read that I thought

they were going to talk about like

people's like breast sizes going down or

something like that over time or

something no they're not talking about

boobs they're talking about the ping

pong tables have turned that's their

lame line here but anyway companies are

cutting back on prized employee perks

from fancy coffee and free cab rides

yeah you're still getting the

traditional health care and retirement

but these other forms of a compensation

like free laundry dry cleaning special

coffee Baristas extra days off like

Salesforce was giving employees a

wellness day off like a paid day off to

just go home and do whatever you want

sitting in your bedroom uh and all these

perks basically going away now because

employees don't have pricing power

anymore baby it's over this is called

recession employees don't got no PP no

more

uh you know at uh getting rid of uh as

much of their their dining compensation

paid birthdays used to exist those are

starting to go away

this is very normal on a daily basis we

are now seeing more and more evidence

that employees do not have pricing power

and that is exactly what this labor

report is showing so if you're looking

for good news today

and I understand listen I want employees

to make more money but I want to be very

very clear

Brandon says what kind of research were

you trying to do I was reading the Wall

Street Journal okay anyway uh they're

pretty good okay I like the Wall Street

uh but but anyway this is a sign that

pricing power for employees is gone and

the the Bureau of Labor Statistics is

finally starting to catch on thank God

because imagine if we combine a wage

price spiral with a financial crisis

would be screwed best case scenario

Silicon Valley Bank and all these these

over levered Banks they go bankrupt

leave the big Banks alone JPM Bank of

America whatever they'll get hit they'll

suffer losses people keep coming to me

especially you all know I have course

member live streams I think I get asked

at least once a week why don't I invest

in the banks at least I get asked once a

week from course members Kevin I want to

invest in the banks why aren't you

investing in the banks why are you

investing in the banks and you know my

answer is every single time you can look

at the entire Archive of my course

member live streams course members will

attest to this it's a coupon down the

below by the way for St Patty's Day

uh what and you can start using it now

what is every what do I always say my

response is I don't touch financials in

a recession because I have no idea what

the hell is happening to those loans and

this is exactly what's happening here I

don't touch financials in a recession no

thank you I do not go near them

oh good lord uh yes employee PP is

shrinking this pricing power going away

for employees look again I don't want to

see employees like lose money I don't

want to see people get fired because it

hurts people okay I do have sympathy for

people okay I I like when I grew up we

had single 20 bills left over we

basically almost went through

foreclosure my dad did something known

as feeding the kitty where you basically

like you you we sold we had to sell her

a lot at home because our jobs lost went

through divorce is Hell had no money uh

and he basically took the last amount of

money he had to do the right thing and

actually well I shouldn't say do the

right thing and because that's an

offense to people who who go through

foreclosure but but he didn't want to

rip the bank off in his opinion that was

his opinion and so he took all of the

leftover savings we had and paid the

loss to sell the home it was like our

last 20K or whatever and we're down to

nothing just to avoid a foreclosure

anyway so uh average uh work yeah and we

had nothing for like seven years that

sucked car getting repossessed it sucked

average work week for all employees uh

on non-farm payroll Edge down this

edging down is also a sign especially

here in manufacturing see manufacturing

had more of an edge down 0.2 hours this

edging down is a reversal from January's

report you want to see more of this

because again you do not want to see the

conditions for a wage price spiral

that's why I'm cheering the last pricing

power again it's not to be offensive to

people it's just simply to say we do not

want pricing power right now we don't

want employees feeling like they can

keep getting raises raises raises raises

because that's just going to lead Jerome

Powell to Paul volkeras and if he Paul

volkers us I guarantee you everybody's

worse off because then companies go

bankrupt now now is not the time to ask

her more money you know let's get

through 2023. anyway this is insane so

so anyway let's see what else do we have

here

Market is now reducing their chances of

a 50 BP hike yesterday they were hot I

mean the market was pricing in like a 70

chance of a 50 basis point hike uh in in

March here March 22nd this report now

cooling those expectations again this is

fantastic uh inflation report obviously

CPI on the 14th is going to be a big

deal employment of temporary service

helpers is considered a leading

indicator of the labor market actually

increased for the second month after

falling for two months it shows us at

least some remaining tightness okay the

temporary service now interestingly

something that you're seeing with temp

jobs is a lot of people taking second

third and fourth jobs right so I know

that sounds crazy but especially with a

remote these days you are seeing that uh

let's see here yeah again I do wish the

January data was revised down more

that's true only a 34 000 revision over

the last two months and 13 000 revision

for January is actually not that great

however you are starting to see that

wave of layoffs employment in it has now

decreased fifty four thousand fifty four

thousand tech jobs gone since November

as since October you've lost 42 000

transportation and warehousing jobs in

aggregate here slightly lower than

expected way okay good good good good

good okay so so that's jobs Break Even

inflations Now is a reaction break-evens

uh still sitting about 2.42 still a

little hotter than the hole we were in

but massive plummet let me see what

other revisions we have do we have any

other revisions no again that inflation

was great terminal fed funds rate

teetering now around 5.5 fell to as low

as about 5.45 this morning sort of in

volatile pre-market news here but uh 5.5

is the expected terminal right now

nicely down from that 5.65 Peak that we

had we'll take a quick look at Treasures

you're still down 16 basis points on the

two-year and if we jump on over to the

uh 10 year you're down 10.3 basis points

now at 3.82 so again I I would call this

a when this is a successful employment

report this is showing the fed's efforts

are starting to work now in my opinion

it's time to start slowing down because

you're starting to see the The Dominoes

starting to fall in the banking world

and that's bad because we do not want to

walk into a financial crisis so how how

does all this stuff come together and

change potentially the investing

strategy going forward well actually in

my opinion this reiterates the volatile

Nike Swoosh this report reiterates the

volatile Nike Swoosh you're going to

have pain like like a Silicon Valley

Bank going bankrupt nearly they're

technically not bankrupt yet but they

probably will be before the next few

months are over I would get my money out

of there do not rely on FDIC if you have

money in Silicon Valley Bank or really

any small Bank be careful this is going

to be a this is going to be

a class draft for even other small Banks

because people are going to go oh my God

I want to take my money out of these

other small Banks and move into bigger

Banks that'll actually help Shore up

companies like Bank of America and JPM

or whatever but it's very dangerous for

the other small Banks who don't go

through the rigorous Federal Reserve

strata stress tests that the small or

the larger banks have to go through but

again you're going to get that sort of

volatility this report

you can wipe the swipe sweat off your

head this is good we're going in the

right direction yes I know the the

headline number came in still high but

again those are jobs that we're getting

in areas that are still either below

Trend or below pre-pandemic levels

Leisure has Hospitality isn't even below

Trend it's literally below pre-pandemic

level still so totally normal I'm happy

about that I am much more nervous about

what's starting to happen in the banking

sector jobs report good let's now get to

CPI on the 14th and hopefully we also

get a relaxing CPI report this is a good

leading indicator for that CPI report

hopefully coming in smoothly I'm hopeful

this is why indices are now turning

green

I'm optimistic

but again we don't want to be blind to

the potential black swans that are

coming our way so anyway check out those

programs on building your wealth link

down below because they're awesome

you're gonna get some pretty incredible

perspective especially on fundamental

analysis and and looking for red flags

at companies which companies are going

to survive this recession that in my

opinion is where the big money is