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Thanks for watching all right, 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.