We got to talk economic forecasts and we gotta watch these forecasts before the dates actually come up. So you're prepared and you realize what the expectations are. Now look even Bloomberg is complaining about the fact that Holy Smokes estimates and forecasts are probably going to be a little wild here. That's because we're coming off of Seasonal Adjustment month and you know what seasonal adjustment month means, right? Well look at this.

Okay, so before we get into some of the actual forecast data which you want to write down, it's important to understand what the hell happened in January and Barons put together a phenomenal piece. This is a screenshot from their piece, not the whole thing, but this is a phenomenal piece right here. that just gives you a quick little outline of some of the insanity uh, that happened in the data from January which was essentially shown to us in February which led the stock market to have a little bit of a heart attack and a 10-year treasury yields to Skyrocket near and above four percent. So what do we have over here? Payrolls The first tough report we got, payrolls actually declined by 2.5 million jobs per month.

However, the seasonal adjustment for January was we were expecting a loss of 3 million jobs. As a result, we had about a 500 000 jobs blow out. So think about that. Only in America can you literally lose 3 million jobs and then have the Bureau of Labor Statistics tell you.

Holy crap, we added 500 000 jobs. It's because their assumption was we would lose 3 million and we only lost 2.5 good. Lord How do we trust this sort of noisy data? Uh, then what do we have here? The average work week it says jumped? Oh no, it jumped to 37 point or 34.7 hours, which potentially implies that wage earners have pricing power, right? PP And that's not necessarily the best case scenario because even though we want people to get paid more over time, we don't want them to get paid so much more that all of a sudden we have an inflationary spiral, right? So when the average work week jumps, that seems scary, right? especially since it jumped from 34.7 to 34.4 good. Lord I'd love to only work 34 hours a week I Think I work about 80 to 90 hours a week.

But anyway, that artifact was thanks much to warmer than average temperatures in much of the United States which resulted in fewer hours lost due to bad weather in a typical January Oh good Lord. Okay, what about that three percent jump in retail sales? I mean that the January data was terrible, right? We had a three percent jump in retail sales data after all, that was two-thirds greater than the consensus forecast. How are you going to explain that one away? Oh well, as Morgan Stanley's economics team here writes via Barons January sales typically decline by 20 after the December holiday frenzy. With this January sales only falling 16.2 percent, there was an outsized boost to the seasonal adjustment figures.

In other words, well, what about the hot retail sales data? Yes, well, usually in a typical December sales, uh, December to January sales in January dropped 20 percent. Oh, it's not Christmas anymore. it's only Kevin's birthday and Kevin don't get that many gifts, it's Academy kids. But anyway, Uh, with this January sales falling only 16.2 percent, we got a positive retail sales read.

So wait a minute. Retail sales can literally fall 16.2 percent and our government's going to tell us plus three percent. Yes, now we can understand this. I'm not saying seasonal adjustments are wrong, right? We try to smooth out the insanity of the year, but the point is this: January was pretty freaking weird.

Not Only was the weather very different, but you also have a lot of pandemic labor holding hoarding hoardling. Oh my. Lord Uh, you have a lot of pandemic labor hoarding that is, people who hired people seasonally for for the uh, you know, holiday season. Uh, all of a sudden don't want to let go of employees because it's been so hard to hire people during the pandemic.

We're all a little shell-shocked Uh, here's another one. The report showed a 17.7 increase in light Motor Vehicle sales but unadjusted Light Truck Sales were actually down 18.6 percent. You know it's just annoying that when we look at this data, the actual data is just a massive negative. But then when these seasonal adjustment comes in, it's a massive positive.

and again, we're trying our best. And that's why these seasonal adjustments are done to compare 2023 to other normal years. But I Want to ask you how normal does January of 2023 feel compared to other quote-unquote normal years? Probably not very normal. So now we got a look at forecasts because the forecast? they're not that great.

Uh oh uh. It is also worth noting. Um, you know the Wall Street Journal and sort of this topic of Labor boarding. I Was reading this yesterday in the plane and I thought this was actually a really, really good piece right here.

This was a phenomenal one. It's super short, so let me hit this really quick and then we'll do the forecast. So the Federal Reserve's efforts to slow the American economy doesn't appear to be working. People like to say it's pushing against a string.

It's kind of a good analogy and so they're they're talking about. Look, the FED is trying to slow down the economy, right? But we're getting that hot data we got in January which we kind of just threw some you know, salt on basically. uh and then over here, what are we actually kind of seeing going on in the economy? Well, I Thought this was interesting card swipe data from the security firm Castle Systems. It's basically a company that makes sure that only people who actually work at a company can get into a company office building.

Think about it, like key cards, badge cards, right? They say that office occupancy is around 50 for the week ending Feb 22 2. And while that's an improvement from a year earlier of 40 percent, we used to be around a hundred percent before the pandemic, so you have to think about that like things are really, really different. How do you seasonally adjust things compared to the last decade when office occupancy is half of what it previously was. How about going to the movies? Well, they say here that going to the movies brought in about 1.08 billion dollars according to Box Office Mojo Better than what we had last year for the first two months of the year, but well short of the 1.54 billion we had in the first two months of 2020 before the pandemic.

So in other words, somehow movie Chains are basically down 40 to 50 percent. Yet, we're still supposed to somehow make seasonal adjustments compared to the last decade. It doesn't make any sense, right? And and the Wall Street Journal here says look, this is happening everywhere. Visiting amusement parks, outpatient surgery, you're seeing more frequency than last year, but still way less than what you saw pre-pandemic For example, they say they give sort of an example I Don't know about this, but more men might be keep, might keep wearing their long hair.

but Barber visits will probably pick up anywhere. Health Care Employment Finally got back to pre-pandemic levels, but it's probably below where it would have been otherwise. Now, this is actually a really interesting argument they make here, and it's best to visualize it, so if I draw it out, it'll make a little bit more sense. But basically think about Healthcare employment.

Uh, sort of hitting like a little low because of uh, you know, people getting laid off for elective surgeries or whatever and it's sort of rebounding. Well, we might be back at the same level where we were before the pandemic now, but the problem is, usually we actually grow the healthcare industry because people, are, you know, aging. So we should be here in sort of the green line, which is substantially higher than where we were. But we're not.

We're just back to levels where we were in healthcare in 2019. let me read that to you: If the healthcare sector had added jobs at the same Pace following the onset of pandemic as it had over the previous 20 years, its payroll count in January would have totaled nearly 900 000 jobs higher. Well, how's that going to show up in the jobs data? You know, if we actually just went back to typical Healthcare Trend we'd be adding 900 000 jobs. Yeah, even if you divide that over a year, that's like adding another 80 000 jobs a month just to get back to Trend That's not even keeping up with the trend.

It's insane. So of course, when you do the seasonal adjustments, it's like dude, how the hell are those supposed to be accurate Now of course, all of this unfortunately contributes the idea that well, it's going to be hard for the FED to slow things down because we kind of are trying to get back to the old school Trend Growth right? And so that does kind of apply higher rates for longer, but this isn't a higher rates for longer video Even Though that's exactly what Mayor Daley And basically everybody at the FED is saying it's gonna be higher for longer. Whatever. Whatever.

this is a video on forecasts and we we've got to make sure we talk about those forecasts because as much as I hate to say it, the forecasts are going to be very important for the stock market. I Don't care how many times like on screen now, Bloomberg tells you that around the time of spikes or troughs, the forecast data is really bumpy and lumpy. In other words, it's really easy to predict and forecast when we're in these sort of tight bands over here. Really, really easy to do.

The yellow bands, by the way, are estimates, so the yellow bands show you estimates and the little dots show you the forecast or the historical. So basically the white dots are what actually happened and the yellow bands were the forecast. But every time we get around these sort of Curves you end up finding that that basically, uh, you get this: these potential outliers and data I Mean look for example, all over here. On the right side.

What you'll find is you have all of these estimates at various different levels and all of the estimates vast. The vast majority of them tend to be wrong because we get get some kind of crazy outlier or whatever as a result. So keep that in mind when we look at the numbers that we are expecting here. So what do we have for Catalyst Well, the first thing that we have is on.

Uh I mean we've got some Factory orders for the beginning of, uh, the week. On the sixth, we're gonna get Factory orders at 10 A.M eastern time. We're expecting those Factory orders to come in at negative 1.8 percent excluding Transportation positive one percent. whatever.

Uh, whole, we got wholesale trade figures coming in. Expected to be negative for both sales month over month. By negative 0.5 inventory is negative. Point Four fine.

Whatever, What's going to matter more? Well, probably the ADP report. So the prior ADP report came in with a hundred and six thousand private jobs created the ADP report which is sort of our private estimate of what's going on Jobs Market is expected to come in at 200 000. that's going to be important. Pay attention to the ADP report.

We'll also be paying attention that ADP report comes out on the 8th. That's Wednesday and the ADP report comes in at 8 15 Eastern Time Then on the 8th at Uh 10 A.m Eastern time, we're going to get the Joltz report. That's the Job Openings and Labor Turnover report. Very important.

that Job Openings Report is expected to show 10 million, Five hundred and eighty four thousand jobs. That is going to be less than the prior release of 11 million. But then again, we don't know how much this a labor uh forecasting really matters given that private leading indicators of data suggest yeah, things are probably not as hot as they appear Because we're starting to see websites like Indeed.com post less aggressive hiring attempts over their advertising, less for hiring. Basically everything seems to be inflecting substantially downwards when it comes to actually hiring.

So this Jolts report, which is again, the government's data, might be relatively lagging once again. Then on Thursday we'll get initial jobless claims. We keep sitting around 190 000 jobless claims, which is way lower than what economists are really expecting to actually show weakness and how in joblessness. But then again, this is a very lagging indicator.

So more interestingly, these are the interesting ones. We're going to get the actual Labor report on the 10th at 5 30am Am Pacific 8, 30 Eastern time. I will be live streaming that potentially from Florida That's right, I'm expecting to go to Florida This week, we got to look at some real estate for my housing startup. You can learn by the way, every kind of perspective that I have for making money in either real estate or stocks or Building Wealth or making more money at your job by the course is linked down below.

But I will be exploring for my real estate startup. Florida Real estate places Hot Hot Hot. Literally, the weather is a lot warmer than where it is in the rest of the country, but real estate's also do it phenomenal there. But anyway, I'll be streaming that live at 5 30 A.m Pacific Time 8 30 a.m eastern time.

We're expecting 215 000 jobs, unemployment rate stable at 3.4 215 000 jobs by the way, will be less than the 517 000 jobs we got last time. I will also be looking at average hourly earnings. Very important, we expect that to be stable at point. Three percent.

that's probably one of the most important numbers is a stable point three percent of the month over month because the year over year is expected to come in a little hot thanks to just sort of year or your numbers. We're looking at 4.7 versus the last report of 4.4 so that'll show an increase, but as long as that month over month remains stable at 0.3 percent should be okay. Maybe we'll even get a Miss there and come in at point two. Then of course on the 14th which I believe is a Tuesday The following: Tuesday We're going to get CPI that is the Consumer Price Index month over month prior.

0.5 survey says 0.5 four that's still very hot. 0.4 still represents 4.8 annualized inflation. Don't talk to me about exponents. annualizers always times 12.

if you do the math, you'll see why. anyway. Cpix Food and Energy month over month. Point Four A match of the prior for the expectation year over year.

Oh, this actually moved up a little bit year over year. The prior release was 6.4 The last time I checked this survey was sitting at 5.9 It's actually moved up to now six percent. CPI X Food and Energy year over year. Prior release: 5.6 This survey 5.4 So you can see you're kind of seeing a very, very slow softening on some of these numbers which isn't great.

Kind of implies that sort of stickiness for inflation in my opinion. As long as we don't get some kind of horrible outlier like a 0.6 month over month uh, or something insane, uh, which would really be 0.6.7 Whatever, we should be able to confirm that we're in the direction of not Paul Volcker. However, we are in the direction of higher for longer Baby higher for longer. And who doesn't want to be higher for longer? I mean the fading effects of inflation are just anyway.

Uh, okay, so uh. then after that, we will of course have the Federal Reserves Open Market uh committee meeting and press conference. The most important one here is going to be uh, the 22nd. That is the date you want to mark your calendar for that that would be and 11 am or Pacific Time 2 P.m eastern time on the 22nd.

Write that one down. I'll be streaming that as well CPI Jobs Fed will be streaming on the 15th, which is literally the very day after CPI comes out. we'll get PPI that is the producer price inflation number. We're expecting that to be point three percent month over month.

well down from the 0.7 prior Core X Food and Energy slightly higher 0.4 but still down from the 0.5 prior. And by the way, that's the Ides of March March 15th. It's also the day Chachi PT is supposed to be introducing new stuff. Uh, Anywho, Ppix, Food, Energy Trade 0.6 prior 0.3 survey.

so we'll see that would be nice. So if we could just get a stable CPI stable PPI If they could just meet these expectations I don't I don't need a big you know, like like a big thank you or whatever. like some kind of big low read or whatever to pump stocks in the short term. Uh, as long as we're not going towards Paul Volcker.

I'm very happy with my investing thesis. My investing thesis is not going to do well if we have Paul Volcker. No investing thesis is going to do well if we hit Paul Volcker. other than short sell and cash.

But I don't think we're going to a Paul Volcker. I Think we are going to go through a Nike Swoosh unstable recovery that is going to substantially favor stocks with big PP How hard is it to just ask for a reward for having big PP That's all we're asking for. We just want to be rewarded for having a large PB Because large pricing power is exactly what we should be looking for at companies going forward in my opinion. Uh, then we also uh oh my God.

Wow. A lot of catalysts. Then we also get retail sales data on the 15th retail sales data. Rather than expect, uh, jumping three percent because of that stupid January data we talked about.

We're actually going from three percent to just 0.2 percent. Oh tell me folks, it's like the the January numbers are just insane Retail sales X Auto 0.3 is the survey from 2.3 in the prior good Lord Business inventories come out the same day on the 15th. Expected to be flat. Prior was a 0.3 increase.

So uh, boy, that's uh, that's those are a lot. A lot of catalysts. Very, very, very big amount of catalyst. So uh, is somebody here uh writes I don't know Kevin Lots of downside to go.

Well, if we get towards Paul Volcker, you might rewrite. You might be right.