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let's get to some other updates hey

folks so quick uh summary on the jobs

report it's actually pretty good news

like last year we had these crazy

disastrous jobs reports where you'd have

non-farm payrolls come in at like 800

000 when the expectation was four

hundred thousand and then you'd expect

four hundred and come in at seven

hundred thousand and you had these crazy

wild swings on jobs days and there's

potentially a belief that maybe we had

such a crash in markets yesterday

because people were fearful that oh no

the jobs report coming up was going to

start showing signs of stagflation which

potentially could be a sign that well

obviously the economy would be

stagnating evidenced by potentially

fewer jobs like a jobs miss while at the

same time inflation you could have

potentially had

average hourly earnings go up in

in march which or sorry rather in april

which would be a terrible thing because

then you'd have potentially less hiring

at higher prices and then that's where

you get to even less productivity and

you get more of that stagflation that's

not what we got here what we actually

got was a stable unemployment rate we

were expecting it to go down a notch 0.1

percent uh down to 3.5 it stayed stable

at 3.6 we got a 300 i'm sorry 428 000

jobs non-farm payroll jobs we expected

391 000 total business jobs 406 we were

expecting 380. so slight beats like

nothing like overly hot like this is

pretty much right at expectations but

here was some magic okay the average

hourly increase

month over month was 0.3 percent which

if we annualize that by multiplying by

12 we get a 3.6 percent sort of speed

that we're moving at in terms of wages

going up that's obviously still more

than the two percent that the fed wants

but it's way better than the nearly 9.6

that we thought we had in january that

ended up getting revised down to 6.6 in

january eliminating or at least reducing

some of the fears of the wage price

spiral but every jobs report since then

we're like are we going to see that wage

price fire come up again and we didn't

really see that here now even though

last month they revised up 0.1 percent

for the month over month both months

still below expectations and still

coming in way softer than inflation so

no evidence of that wage price spiral

here which echoes what jerome powell

told us just two days ago no evidence of

a wage price spiral because remember

what j-pal says if we saw evidence of a

of a wage price spiral they would have

to deal with it because a wage price

spiral can lead to regime collapse just

in case you're not super familiar with

that here's just like a quick 20-second

explanation

if wages are in a wage price spiral

wages go up which allow individuals to

go buy more stuff because they're buying

more stuff and wages are up businesses

feel they have pricing power so they

raise prices more and then you get wages

that are now demanded to go up even more

because prices are higher and so you

kind of get this like stair-stepper

effect and that could be entirely

uncontrollable and could lead inflation

expectations to go through the roof so

that's not happening which is good

factory hour uh factory hours worked

went down slightly under expectations we

were expecting 40.7 hours worked went

down a little bit to 40.5 uh not sure

you know if there was anything in

particular in in april here other than

supply chain issues which you know could

be to explain this but this is a

relatively uh a nominal move there

average hours worked

were expected to be 36.7 came in at

30

uh

36.6

so only a slight little move there not

not sort of a big difference at all um i

actually messed that up by a factor of

two hours there but roughly the same

difference anyway so the expectation was

34.7 we got 34.6 so still just pretty

much a long expectations here so uh look

takeaways here uh the biggest problem of

this report is that labor force

participation went down a little bit

went down two tenths of a percent this

is kind of bad for the fed because the

fed wants labor force participation to

go up not down especially when we have

1.9 job openings per unemployed person

it's like why why why is labor force

participation going down and not up and

it couldn't it could entirely be because

people have a whole lot more savings

than they used to have people don't

necessarily have to work right now which

is is really wild let me give you a

couple notes here

so uh in late 2019 just before the

pandemic began the combined household

net worth in the united states of of

individuals was equal to about eight

years of consumer spending so that means

like if you took everybody's net worth

and combined it we would get roughly

eight years of spending well thanks to

the pandemic now we're at

9.5

times uh

you know combined household net worth

for 9.5 years of spending basically

compared to eight now that might seem

like wait a minute but that's only a

year and a half more of spending that's

a lot that's another year and a half of

gdp that's like 30 trillion dollars it's

insane but when you compare it to 2011

it becomes even more apparent when you

compare to 2011 you're actually 50

percent higher

with the amount of spending that we're

capable of doing compared to 2011

here let's make it a little bit more

simple the average u.s household net

worth right now

is capable of supporting

140

more consumption than it was

three years ago so yeah even though

things are poopy doopy in the markets

right now people have more money and

they can spend more money than ever

before