Watch BEFORE Tomorrow [Jobs Report]

unemployment claims but in addition to

that we need to talk about what you need

to know going into a Friday March 10th

Because the actual BLS which should just

be shortened to BS you know Bureau

statistics yes anyway Bureau of Labor

Statistics releases their jobs report

tomorrow at 5 30 a.m Pacific Time 8 30

a.m eastern time I will be covering it

live so make sure you tune in to the

meet Kevin Channel but I'm going to give

you the Bloomberg estimates right now

and I'll also give you some Wall Street

estimates for what to expect going into

the labor report tomorrow this is a big

deal I want to prep you for it but first

let me just cover that yes we did end up

getting initial claims today that were

actually dare I say bullish for the

market this is not a good thing for

individuals I want to be very clear I

sympathize with anybody losing their job

I don't think it's fantastic for people

to lose their jobs it is unfortunate

that going into recessionary

environments unfortunately the

likelihood of people losing their jobs

increases right that's sad but anyway so

what happened today hey this video is

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we got initial jobless claims that came

in at the expectation was 195

000. the prior read was 190 000 in

claims sitting below 2000 is uh is or

sorry two hundred thousand is still

showing a pretty strong labor market we

did just finally come in with claims of

211 211

000 that is uh more jobless claims than

expected by about six ish percent that's

actually good news for markets you do

have continuing claims that came in

higher than expected as well continuing

claims coming in over uh 1.7 million

continuing claims we're sitting at uh

the actual number here

1.718 the expectation was

1.660 now what I'd also like to tell you

is the revision the prior read was 1655

that was actually slightly revised down

to 1649 barely a revision barely a

revision probably not worth talking

about because it's so nominal what's

more important is that we actually beat

the survey today with higher continuing

claims uh it and again this is what the

Federal Reserve is trying to engineer

right so the sooner we get job loss the

sooner we could say okay we're in a

recession and the sooner we could get

over this now I hate to say it but it's

kind of like ripping off a bandage right

now it just feels like we're kind of

like peeling up the edge of the bandage

and we're just like a child we're like

man it's like I don't know why mommy put

a bandage on like the hairy part of my

arm you know it's like you're kind of

feeling it up it's like it hurts it

hurts it hurts it's like somebody just

needs to come along and go quick it's

like ah uh but but nobody nobody wants

to because it's just it's painful right

so we're just kind of sitting here going

huh well maybe if we just keep healing

it eventually it'll go away and maybe

it'll hurt less in aggregate but it'll

be it'll be more annoying for the longer

period of time I somewhat feel like

that's what's going on with the economy

if we had to compare it to a crusty

bandage uh maybe just take a few showers

and it'll just just wash off but anyway

tomorrow's numbers very important so

last month in January we had an

absolutely insane read from uh the labor

report we had 517 000 jobs now that 517

000 jobs was expected to be mostly a

joke uh dare I say a joke but it was it

was terrible we had Barons basically

tell us the uh seasonal adjustments for

January were so ridiculous that uh

really you can't put any weight on the

January data that we ended up getting

because of how different the environment

is this January compared to really any

of the januaries we've had in the past

now I don't want to come across as

suggesting that this time is different I

mean every single year January is

considered seasonal adjustment month but

bottom line Barons is basically saying

the Bureau of Labor Statistics was

expecting us to lose somewhere around

2.8 million jobs in January compared to

December whereas usually we lose

somewhere around 2.3 million jobs so

that the bar for for job loss was was

actually set so much higher that when we

got the actual jobless report the

unemployment report the numbers came in

so much stronger thanks to this insane

seasonal adjustment and the potential

excuses for that are one labor hoarding

that is more companies saying look I

still have enough money to where maybe I

can sustain through the recession it's

been so hard for me to hire people I'm

going to keep people rather than being

super reflective or responsive to the

market where as soon as things slow down

I start firing because people are

somewhere shell-shocked and they don't

necessarily want to start firing people

because it's been so painful to hire

them in the first place and in some

cases so expensive to hire people in the

first place so they don't want to go

through that kind of garbage again

anyway the seasonal adjustments for

January are expected to suffer from Big

revisions as well so what I one of the

big things I'm looking forward to

tomorrow is not only am I going to look

at what happened with the actual numbers

tomorrow which I'll give you the survey

for in just a moment but I'm actually

going to look at the revision so the

survey for tomorrow and changing

non-farm payroll is 225 000. that's a

that's basically half of what we had

before at 517 000 but I really want to

pay attention to obviously best case for

the market that comes in soft right

change in non-farm payrolls if it comes

in lower that is less people got new

jobs from 225 if we get something like

what Wall Street is more expecting like

uh Barclays JP Morgan most Wall Street

firms are expecting somewhere between

190 to 200 although the firms surveyed

by Blue Bloomberg

have an aggregate estimate of around 225

000 so let me say the firms that I'm

reading reports for Wall Street let me

clarify that are suggesting 190 to 200

the Bloomberg consensus which is many

more different firms they're sitting at

225

obviously if that comes in lower it'll

be bullish because it'll it'll show okay

all right finally the fed's work is

starting to have an effect maybe that

means if the fed's work is starting to

have an effect January was just an

anomaly and maybe just maybe the FED can

slow down their rate increases because

finally their rate hikes are starting to

impact the market that's a big deal

markets are waiting desperately for

evidence that the federal reserve's rate

hikes are actually affecting the market

worst case scenario you end up getting a

Kenny G response where basically the

Federal Reserve is hiking but the market

keeps growing that is the economy keeps

growing people keep adding jobs and we

actually get a strong jobs report like

if tomorrow we got something like a 250

or 300 000 jobs report people are gonna

freak I think you're just going to get a

straight down in the stock market

because what's going to happen is you're

going to build up so much fear that oh

my gosh January is a reanimation

of the economy it's like a zombie that's

getting up again and and the fed's been

trying to shoot it with a shotgun over

and over again it's been trying to

double tap but the damn zombie keeps

getting up and they're like fine I guess

we have to put in maybe some incendiary

rounds in other words we got it we gotta

raise the rate uh the you know the

Federal Reserve this can rate even more

fed funds right uh and and that would

then reflect in lower stock and asset

prices because that's what we do as our

expectations for the FED funds rate go

up stock market goes down now it's been

relatively resilient the fact that we've

gone from 4.9 on a terminal rate to 5.6

and if you know only slightly traded

down on markets is phenomenal it really

suggests that markets are more fearful

of Paul volcker than they are of a

slightly increasing fed funds rate

that's higher for longer that's really

what the market is telling you right now

but boy if we get a bad jobs report

tomorrow we're going straight down we're

going straight down because it's

suggesting that January was not a

seasonal adjustment anomaly it suggests

that oh good lord the zombie is back up

the fed's going to have to get a lot

more aggressive than anybody is

expecting we can't give February that

same seasonal adjustment excuse so

February's hot it's bad news depending

on how hot it is is going to be really

interesting now keep in mind the the

only leftover excuse if we get a bad

report tomorrow for for the jobs report

would be that well I mean unemployment

is lagging okay yeah everybody knows

that unemployment is like well not

everybody some people still think

unemployment is a leading indicator

which is insane unemployment is a

substantially lagging indicator and and

so the only leftover excuse if we get a

hot jobs report tomorrow is that well

you know it's a lagging indicator that'd

be the only leftover excuse but but

really the bull argument would start

looking very very weak if that were the

case right uh and loading up the

incendiary rounds to the door on an

online raid rust references anyway so uh

the surveys 225 for non-farm payrolls

the unemployment rate is expected to

hold stable at 3.4 percent here's

another very important statistic the

change in average hourly earnings this

is going to be a very big deal uh it's

going to be one of the first things I

look for at that unemployment report

tomorrow is that change in average

hourly earnings because this is where we

look at what's known as an average

hourly earnings wage price spiral

induction in English

if people keep getting paid more money

month of a month in other words people

got paid more money in February than

they were making in January well hot

damn it clearly means people were given

the Jerome Powell a big middle finger he

gonna have to do a whole lot more to

hurt us

that's it just didn't like simple plain

English here uh 0.3 is the expectation

that annualizes and please remember it's

not an exponential function it is just

multiplied by 12. point it's not like

genius math okay this is very simple if

the expectation is 0.3 it means the

annualized annualized rate of inflation

the speed we are traveling at not

compounded just the speed we're

traveling at it's three point six

percent for wage increases that is

obviously still higher than expected so

like best case scenario tomorrow we get

some kind of unemployment report that

says uh you know we get 200 000 new jobs

or less a one handle would be like sexy

and beautiful and a turn on uh this is

what happens when you're in finance all

day long those are the references you

make but anyway uh average hourly

earnings uh move from uh if if we can

get instead of a 0.3 anything below that

like I'll take a point two all day long

I'm not even gonna ask for anything

lower than that I'll gladly take a point

too that would be very very delicio show

now do note that the average hourly

earnings year over year expected to step

up from 4.4 to 4.7 percent but that does

not matter so terribly much as the

actual average hourly earnings coming

down on a month or month basis that is

going to matter more again survey point

three now uh average weekly hours worked

is expected to slightly tick down again

to 34.6 the lower average hourly uh

average hours worked per week comes in

the better for the markets because the

lower that number is again the survey is

34.6 down from 34.7 less the lower that

is the indication is the softer the

economy is and the less demands there

are on workers to work harder longer

longers actually the the precise way to

put that uh now that's an indication you

know if it comes in too low then it's a

sign that oh no the recession could be

worse right but really we we so so we we

have to have a very balanced report

where it comes in some off but not not

so soft on average hourly Works hours

worked average weekly hours worked

because that signals recessionary fears

right so like it could come in too low

where it's like oh my God recession

labor force participation rate is

expected to be stable at 62.4 percent I

still think it's remarkable that the

average hours worked is only like 32

percent I I don't I have no idea who

only works 32 hours uh or 34 hours

whatever it's like no difference at that

point whoever that is I'm I'm very

jealous uh yeah anyway but uh one of the

things that I do think is very

interesting as a potential impetus for

uh actually potentially higher labor

reports that is more jobs being created

and potentially less inflation for wages

now this is this is crazy think about

what I just said more jobs created but

less inflation okay well how does that

work well what it means is if we

continue to get more Leisure and

hospitality and Airline hiring air

travel Services Hotel whatever if we

continue to get more hiring in that

sector we're going to see a higher jobs

report

but if more people are available best

case scenario here's like your your

ultimate best case scenario right

you get a a consistent with survey jobs

report a lot of those jobs are in retail

and hospitality and travel but the

average pay is going down or or like the

increase the rate of increase is going

down right people aren't making less

money they're just making more money at

a slower growth rate right but here's

something very interesting take a look

at this

this right here is uh an article on more

women rejoin the workforce lifting the

economy now I think this is really

interesting because the article goes

through and talks about how American

women are staging a return to the

workforce and this is actually helping

Propel the economy now this is actually

really good because if households look

let's just be clear here a lot of women

and this is not I'm not and nowhere in

this video do I want to be considered

sexist uh or or somehow like trying to

make an argument about men versus women

this is not a political video this is

just Financial fact

Financial fact is that more women stayed

home to take care of children during the

pandemic because Child Care was either

condemned unsafe or unavailable

now

there are a lot of single working

households because we are potentially

going into a recessionary environment

more women may go back to work and this

is not to say that women don't have hard

work when they're at home okay I want to

be very clear about that I highly

respect people who take care of children

all day long because while I can take

care of children maybe all day long once

a week I ain't gonna do it every single

day it's a very difficult job anyway uh

so what do you have over here women have

gained more jobs than men for four

months straight including January's

hiring search pushing them to about 49.8

percent of all jobs created female

workers last edged higher than men on

U.S payrolls in late 2019 before the

pandemic sent nearly 12 million women

out of work compared to 11 uh sorry 10

million for men even as job

opportunities grew a little a year later

nearly 1.5 fewer million fewer mothers

were actively in the labor force in

March of 21 then in February of 2020

amid Child Care disruptions and health

concerns virtual schooling daycare

closures blah blah blah blah the

workforce is powering the economy's

underlying source of strength see now

this is very important if people are

going back to work and they have more

household income then they could

actually sustain economic growth AKA

positive GDP spend which means no

recession because more women going back

to work to supplement men who are losing

their job or are making less money or

not enough money to sustain because of

inflation that we've experienced means

maybe we could actually the more women

go back to work the less likely we end

up having a recession now that's

actually really an interesting idea for

now demand remains strong women hold 66

percent of all jobs in Leisure and

Hospitality that compares to like Tech

where it's more men but anyway women's

employment in these sectors grew by 719

000 in the six months ending January uh

accounting for 38 of all private sector

jobs

men account for a dominant share of jobs

in smaller sectors such as

Transportation warehousing manufacturing

and construction and the tech heavy

sector but what's suffering from layoffs

well Tech is suffering from layoffs men

uh take up roughly 60 percent of tech

jobs Warehouse manufacturing

construction these areas are seeing a

Slowdown but where do you see a pickup

well Leisure Hospitality educational

Education Health and other services in

other words the services sector where

inflation is still strong is where women

are actually picking up more jobs now

this is actually very interesting

because again it means we could actually

be seeing a higher jobs report as more

women take more jobs

however more availability of Labor

Supply also potentially aligns with less

uh inflationary pressures on being

forced to pay people more money in other

words and this sounds terrible okay but

it's from a finance point of view but in

other words more women going back to

work means wages are not going up as

fast

which means more income for people which

sustains as potentially out of a

recession or out of a deep recession

which potentially sustains earnings at

companies but it also helps us remove

the risk of a wage price spiral remember

a lot of these Services Industries are

still behind well below trend for

employment growth because of the

pandemic Healthcare is back to 2019

levels but we should have another 900

000 jobs in health care if it hadn't

been for the pandemic because so many

people were tired or whatever

so uh here's just sort of an anecdote if

you think there's going to be a

recession and realize your husband or

partner is in a highly sensitive sector

you might decide well I better try to

work more and not quit or just get a job

in the first place nurse saying blah

blah blah blah article goes on a job

paying ten dollars an hour might not be

attractive for women struggling with

school schedules an economics professor

says but if the same job starts at 15 16

per hour and offers benefits she might

take it uh interesting I found I'm in a

much okay here's just sort of an

anecdote of a woman who says you know I

feel more value in my life when I go in

and add value at a job and then I go

home to add value to my family rather

than solely

being with with kids all day long but

but anyway uh yeah it's very interesting

and again this this is not this is not

an argument about you know the the

gender pay disparities or whatever uh

you know again it's not designed to be a

political video here this this is just

fact but the fact of the matter is this

is fantastic news right more income for

households means a shallower recession

it means less EPS pain for companies

which is a big fear of markets right now

and it potentially also means more uh uh

likelihood that we're able to avoid a

Paul volcker uh Rock pull from the

Federal Reserve because uh of uh of a

lack of a wage price spiral impetus so

this is actually all fantastic news I

expect a lot of insight tomorrow from

the labor report again that's at 5 30

a.m Pacific Time 8 30 a.m eastern time I

will be live streaming it uh live just

like I live stream every morning

hopefully you'll join me for sort of the

day's Finance news every morning