Rug pull | Jobs Data JUST OUT Shocks Fed

Well, boys and girls, the labor numbers

are out and I have lost my voice because

yesterday I was screaming so much about

nuts and fruits and vegetables and

debating people about the Mediterranean

diet on the live stream. I basically

went downhill from there. But what

didn't go downhill was the jobs data.

The jobs data was actually somewhat

decent. Now, I know that immediately

pisses off a lot of people who are like,

"Kevin, how could the jobs data be

decent? It's all plummeting." Yeah,

look, it's way lower than what we had

last year. Uh last year we generated

over 2 million jobs in the entire year.

This year we didn't come close to that

number. Uh this year we were uh at

584,000

jobs. Uh which means we averaged about

49,000 jobs per month. And again that is

down from the over 2 million in 2024.

Now, my sort of bottom line take on

this, and I'm I'm going to kind of keep

it a little short because my voice is

killing me, but keeping it a little bit

short, this obviously kills rate cut

expectations for January, but honestly,

it probably also kills rate cut

expectations for March. In fact, the

market right now is pricing in a 5%

chance of a rate cut in January and a

28% chance of a rate cut in March. Now,

why do I say this is Goldilocks if we're

not actually pricing in a full rate cut

until June 17th, which is when we have

the new Fed chair, which could be this

schmuck. Uh, this guy's a wet blanket.

He's better than the Kevin Walsh guy. I

I wish they would pick Myron or Waller

rather than this schmuck, but this

schmuck would be better than Worsh.

That's just my opinion. Anyway, so the

reason I say this is Goldilocks is

yesterday in my course member live

stream and the alpha report which you

can get at mekevin.com. I talked about

how uh and the estimate was 60K

yesterday and that got revised up to 70k

mind you. So this morning we were

expecting 70k jobs. We got 50. So it was

a miss, right? But I wrote anything

[clears throat] over 40 is probably good

given Powell thinks the 3-month average

is 40 uh minus 60. Okay, fine. So that's

stable. We really don't want to fall off

a cliff. Anything under zero would be

really bad because then we're going to

revise down from there. We also had

downward revisions, right? So when we

look at the data, the last two jobs

reports were revised down even more. The

October revision was insane. We revised

October from negative 105 down to

negative

173,000 jobs gone. We also revised

November down 8,000 to 56,000.

So we lost on both of those. Now, where

we gained is the labor force

participation rate actually came down a

little bit, which helped the

unemployment rate, that headline number

fall from 45 to 44, which is interesting

because the Fed says that unemployment

rate matters most to them. They're

watching that headline number, which is

not great. Now, because it's what I call

not great, not terrible. It seems like

you're seeing some anxiety come out of

the market. You see the bond market, the

10-year is staying elevated a little

bit. The the 2-year is rising a bit. So,

you're unpricing some of that spread

between [clears throat] where the Fed's

rate is and where the 2-year market

thinks the rate should be. So, as the

2-year comes up again, you're actually

compressing the steepener, which we

don't want this to go up to 1.25 because

that would mean we're likely in a

recession. Now, something else that

obviously continues to slowly tell us

there are recessionary concerns is this.

Look at this chart. You should remember

this.

Excuse me. So, this is the when I drink

water, it gets better. Um, only a

recession cures the long-term unemployed

number. Only a recession does. Without a

recession, you can't get this number to

come down. This is the 6 months

unemployed level or 27 weeks unemployed

level. It is rising, continues to rise.

It rose again in December, which is not

even charted here. So, it probably be up

over hereish somewhere where my mouse

is. Uh, that's not charted yet because

the data hasn't updated quite yet, but

we already know what the number is. You

can see it. The only way this comes down

is after a recession, but it rises

during a recession or before a

recession. In this case, it was during.

In this case, it was during. In this

case, it was during. It started early,

right? Started in like 2006.

Well, this has been going on for a

while, that long-term unemployed. Now, a

lot of people are saying, well, this

time is different because of artificial

intelligence. Maybe that's true. But I

would argue that broadly what we've got

here is a middle ground kind of

goldilocks. Not great, not terrible.

This is enough to see stocks go up. It's

enough to see a broadening out of

stocks. We did see data that you know

was actually pretty diffuse. You had uh

leisure hospitality up 47k, healthcare

up 40k. Yeah, manufacturing was down 8K,

goods producing down 21K. But none of it

is saying only one sector helped us.

There were multiple sectors that helped

us here. Leisure, hospitality, and

healthcare up 87,000 jobs. It's pretty

decent. Now, private payrolls only grew

about 36,000, which is certainly weaker

than what we were expecting.

Uh, sorry, those were 37,000 for private

payrolls and we were expecting 75,000.

and we had a negative 19,000 revision on

the prior. So, you know, the numbers

themselves weren't great on the

establishment, but again, not terrible.

Now, the household survey was pretty

good. That came in at positive 232,000.

Now, who knows? Some of the numbers can

be rigged. It could all be catchup from

October. But I think really what this

tells us is in the near term with the

Atlanta Fed real GDP level at 5.4% 4%

which is insane. Probably shouldn't be

expecting rate cuts anytime soon, which

is unfortunate because we kind of know

that the underlying economy really needs

it, but we're probably not going to get

them for the time being, at least until

inflation concerns come down. I do hope

that tariffs end up getting banned by

the Supreme Court, at least the AIPA

tariffs, and I think that's likely. I

don't know if that'll be today, but

we'll be watching. Now, something else

to know. Somebody asked me, Kevin, why

does the Fed always only bail out rich

people? Let me answer that because it's

a function of capitalism, and it might

be the most important message out of all

of this.

Out of water, it's not good.

The Fed The Fed only bails out rich

people because they do not have the

functions to bail out poor people. the

government can bail out poor people with

stimulus checks, subsidies, welfare

money, uh whatever. The problem is the

more the government state provides

welfare checks, the more fraud you get.

That's why governments have dead weight

loss. That's why we say government

spending is generally a loser for the

economy because of that loss that

occurs. The government's really bad at

making sure they don't lose money,

unlike a business, which is generally

better at making sure you don't lose

money. Anyway, that's just the nature of

the government. The Federal Reserve

doesn't have the tools to bail out poor

people. The Federal Reserve has the

tools to bail out rich people, people

with houses, people with businesses,

people with debt, and bankers, private

equity. Those are the people who get

bailed out. The Ponzi theory is if you

bail out the top, they'll create a

conducive soil in the economy so good

jobs can grow. That's why when you

understand the rules of the game, you

understand that you have to you have to

know the rules of the game of how the

Fed works. The Fed will only ever bail

out rich people in every single economy.

And as soon as you know that that in the

Titanic the first class people always

get on the boat first. The way you level

up is you become an owner of the means

of production. That could mean owning

stocks. That could mean owning real

estate. It could also mean you taking

advantage of your time by contributing

to a business that owns the mean means

of production where you're actually like

creating real value for a business that

owns means of production. Whether it's

owns real estate or provides AI services

or whatever or you go start your own

business owning the means of production

like become an electrician, a plumber,

HVAC tech or whatever. Grow a business,

hire people, buy real estate. Now you

benefit. That's how the game is played.

That's how the rich keep getting richer.

And that's the Federal Reserve's Ponzi

for you in a nutshell. So yes, don't

expect rate cuts until the next Fed

chair with these sort of job numbers.

We're not falling off a cliff.

This is the same thing we're seeing in

the ISM numbers, the S&P numbers,

[music] the Jolts data. There's no

evidence right now we are falling off a

cliff. And if we can rebound here, we

can stick a soft landing. So, it's more

bullish than it is bearish, but we

should be cautious. Anyway, thanks for

being here. We're going to jump into the

course member live stream now. We'll see

you all in the next one. Goodbye and

good luck. Why not advertise these

things that you told us here? I feel

like nobody else knows about this.

>> We'll we'll try a little advertising and

see how it goes.

>> Congratulations, man. You have done so

much. People love you. People look up to

you.

>> Kevin Praath there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.