Turned the calendar. Everybody thought, okay, everything we were worried about last year just went away, stock soared, and now all of a sudden people are rethinking that since since the jobs number last Friday yeah, I mean she's she's actually right on. That's uh, that is basically exactly what it feels like. It's like everybody who's so happy come January And then all of a sudden the Jobs report comes out and everybody's like oh my gosh, it's the end of the world.

People are getting jobs. People are getting jobs. How dare people get jobs. My: Lord The economy is going to crash and go to hell.

It's time we talk about the reality of the jobs. Market You want to see reality in jobs I'll show you reality in jobs. We've got two massive pieces that we got to talk about right now. Number one is what's actually happening in jobs in multiple different sources.

But we're gonna look at the Wall Street Journal in a massive piece on jobs that just came out. Then we're going to look at what a particular company just told us in earnings and boy, it should give you a really big heads up. And no, it's not Starbucks or Chipotle because I've mentioned them like a million times already. It's another company and it's a big one that's given us a lot of insight into what's going on in the jobs market.

and I Love it. But before we talk about that, I have to mention Nikki leaks. Yeah, what'd you think? Coupon code Mickey leaks over here says the following: The popular belief that energy prices have been driving U.S Inflation is not supported by data. There's strong evidence that Rising prices were not the main determinant in The Surge of U.S consumer prices of inflation in 2021 and 2022..

Now, the reason we like Nikki T And even though we're going to talk about jobs in just a moment, it's worth noting that anytime Nikki T shares something, we actually think that the likelihood is Nikki T is in direct contact with the Federal Reserve and anything he shares is something to pay attention to. But generally what happens when we get information like this is energy shocks basically just flow through other product costs. But the problem is, other product costs are limited by what people are able to pay. So if you go to the conclusion of what Nikki T just shared says, our evidence suggests that an unexpected increase in the level of energy prices by itself does not create persistent inflation.

It only creates a blip in the inflation rate. In other words, inflationary pressures in monthly data weighing as soon as positive gasoline price shocks cease. Now, what's fascinating about this? Well, you came here to learn about jobs. But what's fascinating about this is obviously you care about inflation.

What's fascinating about this is: guess what we expect on Valentine's Day In just four days, we expect a sudden acceleration in the month over month data. Look at this folks via the Fed's mouthpiece. the FED is already casting dovish doubt on the CPI report for Tuesday. That's very interesting the timing of such, but let's now look at what the Wall Street Journal has to say about the hiring boom.

As usual, I've gone through and highlighted the particular report to make it as simple and easy as possible for us to get through it. first. it's really important to remember something that I actually tweeted yesterday. Uh, and and it helps us kind of set the standard for this article that we're going to go through.

but yesterday I tweeted uh, the following: oh did I say that I tweeted uh, forgive me I'm uh okay, I'll I'll I'm not gonna read that part. but anyway, I asked if the average hourly wage of workers is 32 dollars per the Bureau of Labor Statistics and higher paying White Collar jobs are being laid off while lower paid jobs are being added in that 14 to 18 dollar power range. wouldn't the average wage fall that is, wouldn't wage growth while adding jobs actually decline. And the response I In other words, I put the little rocket ship over here and uh, Chamath's burner phone says yes.

The reverse happened at the beginning of the pandemic when average wages went up because low wage workers were let go and higher wage workers were basically being hired uh for for stay-at-home work. And that's really interesting because just that alone suggests to us that even though we could have a hiring boom, even though we could end up getting an unemployment or an employment report, I Should say that ends up showing 500 000 jobs created. What if those jobs are all low paying and they actually lower your average? that would actually show wage disinflation in Aggregate And it actually suggests that if the people who are being hired are lower paid workers, then we might actually be thankful that the jobs numbers are going up. Now this is this is a mine death.

Okay, look think about the Mind F that I just set up here. Okay, markets right now were like oh my. God The jobs Market is so strong the fed, the Fed's Gonna Keep rates higher for longer. That's your consensus right now.

But wait a minute if those jobs are disinflationary jobs and it means we're potentially not going into a recession. These jobs are the most bullish thing ever. Contrarian Viewpoint Interesting idea, but Nikki T is already Throwing Shade on that V-day report I I Look, we're gonna go through this. Wall Street Journal report Nikki T Obviously works for though but Wsj but all I gotta say is you're here for perspective I Thank you and you should subscribe.

Hopefully you enjoy the content and you share it with your friends and your loved ones and anybody who wants to watch. anyway. So what do we have here driving the jobs boom are but often overlooked sections of the economy. Oh my gosh like I Feel like I'm writing an essay in college.

Driving the jobs boom are but often overlooked sectors of the economy. Restaurants, hospitals, nursing homes, and child cares are finally Staffing up as they enter the last stage of the pandemic recovery. These jobs are more than offsetting cuts by huge employers such as Amazon and Microsoft And this is actually true I Mean and they reiterated here Um, you have of a lot of layoffs happening in Tech but tech only makes up two percent of the private job sector. Instead, services like healthcare education Leisure Leisure Hospitality and other services like dry cleaning and automotive repair account for 36 percent of all jobs.

The service industry all together. Uh, let's see here such as Dracula that's 36 these listed right here. Just those listed are 36 percent. All service jobs account for 63 percent of jobs.

This is that last stage of disinflation that Jerome Powell is looking for, right wages coming down this sector. So what are we seeing according to the Wall Street Journal in this particular sector? Well, here's what we're starting to see: Elliot McDonald The Director of Operations for Lanes Chicken fingers in Texas says that the company used to get one job application every two weeks for the last two years recently. Uh, and and that has actually led him to have Staffing shortages and he had to go work the drive through. Oh no.

Imagine that a boss having to work because there no employees. That happens all the time. Anyway, Now he says more job candidates are starting to apply. The company's average hourly wages have risen to Fifteen dollars from eleven dollars two years ago, but now they're fully staffed and they're null and he's no longer having to go work on the line.

now. Initially, we might think oh my. God but Kevin average wage is going from 11 to 15 is bad, right? Well, sure it's bad for an inflationary point of view, but it's great for the workers. This is actually fantastic for preventing a recession, right? Because people are getting paid more money, but it also incentivizes people to work in these jobs.

And fifteen dollars an hour brings down the overall average of earnings, which is disinflationary. But not only does that happen, the increase from 11 to 15 dollars is generally represented in 2022 data. We are going to start lapping that data in 20 2023, which means we wouldn't see the increases again, potentially this year. Another thing that's bullish.

What else we see Goldman Sachs is reducing their estimates of a recession from 35 to 25 percent because of the potential for a shop soft. Landing We think that the process of reducing inflation will take a, uh, take some time, and even though we expected payrolls to decline by 7 000 jobs a month, we're not actually seeing payrolls decline. Why? Because lower paying service jobs are actually advancing the sector and more people are getting hired. Now what's interesting here is: listen to this.

We've talked about Chipotle a million times before, but Chipotle is now above pre-pandemic Staffing Levels: They're hiring like crazy for burrito season and they're not having trouble finding employees anymore. Walmart We know rage raised raised wages. Uh, and nursing homes have also had to raise pay, but again, a lot of that was experienced in 2022 and it drags the average down. But what are we seeing? Nursing shortages mostly gone now.

Easier opportunity to fill jobs. It's easier to find people to work in these sectors. now. Now look at this see: We had significant shortages of staff and particular registered nurses Radiology technicians and many other clinical patient-facing roles.

But fortunately, it's gotten better. The company's relying Less on temporary hiring hiring. There aren't ten thousand dollar signing bonuses anymore for emergency room nurses. Nursing homes might not return to pre-stat pre-pandemic Staffing levels until 2027.

Which is kind of bad because it shows that this is still a process. like things are getting better, but still, it's a process. But you're seeing a lot of information in this article about how all of a sudden managers at restaurants Sous chefs, chefs in general. Whatever.

they're actually applying for jobs again without signing bonuses and companies are seeing a lot of this shift within just the last three months. In other words, a lot more p people coming out to actually work right now. now. What's really incredible about this is I Aligned this idea that okay, people are coming back to work.

Let's think about that for a moment. If people are coming back to work, that could be because inflation is forcing them to come back to work because what well costs are higher, right? Well, where's a place that people can go work and potentially make side hustle money to help them with inflationary costs. But in the process of them contributing their labor, they're actually bringing prices down. Think about that for a moment.

like seriously, think about yourself. Think about that for a moment. If you right now needed some extra side hustle money on the weekend, what could you do I don't personally recommend doing this because I don't think it boosts your resume at all I Don't think it's a good idea, but what? What do most people do? Maybe not most people, but what do a lot of people do all the weekends or in nights Or when they have spare time to make extra money. And when they go, provide that service When they provide that labor right Because their labor is a service.

when they provide their service It Actually drives the price of that service down. Well folks, it's none other than Lyft Lift. What are we seeing at Lyft Lift is talking about healthy Rider Demand But our driver Supply Position has significantly improved. In other words, in English we are losing PP over here at Lyft because so many freaking drivers are coming out of the woodwork to work for Lyft that prices are plummeting at Lyft.

We have so many more drivers than we've ever had before. Now all of a sudden we have so much supply of drivers and not more demand to offset all of that. What are we seeing? We're seeing pricing plummet. Okay, you don't actually have to go through the earnings call to see this reiterated.

All you have to do is look at their stock today, which usually is not the best tell. but today it is. The stock's down 31 in pre-market Why? Because their margins are getting hoes. Why are their margins getting hosed? Well, listen to the co-founder So the supply side has come back in a very meaning full way.

We talked about that already on the call. Some top metrics on the supply side in nearly three years. So in other words, the most supply of drivers in only three in in the last three years. And what do we have over here with this extreme Improvement of Supply you have less prime time so therefore lower prices.

Holy smokes. Think about this folks. the actual data, not the Bears on Wall Street Who are saying everything's going to hell. The actual data whether it's the Atlanta wage tracker that's showing wages trending down I'll pull that one up so you can actually see it graphically.

Whether it's the Atlanta wage traffic Atlanta Wage uh Tracker: Whether it's the Atlanta wage tracker going down or it's the Employment Cost index report showing that wages are growing at a slower rate. Or here's the wage tracker. By the way, from Atlanta, you could see the wage trackers finally inflecting down is still growing, but it's finally inflecting down so the wage tracker is inflecting down. Health Care is finding it easier to hire per the Wall Street Journal Restaurants are finding it easier to hire per the Wall Street Journal You're not seeing a signing bonuses anymore Chipotle is finding it easier to hire Starbucks is finding it easier to hire I've mentioned those two companies like 17 times and I feel bad for reiterating it again.

but it's important because put all the pieces of the puzzle together. What's happening folks? Lyft Is complaining about the most workers ever in the last three years and they're talking about coming off extremely tight labor markets and now all of a sudden, listen to this. Listen, Listen to: I'm going to read you this line: I'm going to translate it to you I Think the great thing for the business is we've been coming off an extremely tight labor market still tracking the unemployment numbers. However, this this basically massive increase of people who all of a sudden just started coming to work for Lyft That data quote is not showing up in the public numbers yet.

but we've seen real softening in Q1. So in other words, I'm just going to translate this because I'm speeding up and you can look up screen and read it yourself. Go read the earnings. Call yourself.

Uh, it's very obvious massive plummet in in, uh in pressures on drivers. Our leading prices to plummet prices are falling. They're not going up because there's so much of a supply now of the taxi service because people want the extra money. But Lyft is literally telling you this is such an extreme change.

We want to let the world know about this extreme change we're seeing and it's not showing up in the data yet. You're not actually going to see this crazy data yet. Uh, notable changes in the re-acceleration of driver Supply Again, that lowers Peak prices. Now they did give us a little bit of a red flag that insurance prices popped up which isn't good because that also hurts margins.

So you do have some elements of those little Embers I Call them of inflation, right? But again, put the pieces of the puzzle together. Chipotle Let's let's write it. Let's write it down for a moment. Okay, because I think it's so important.

Probably by far one of the most important thing uh things to think about right now. If you're wondering, should you be bullish or bearish is wage growth and what do you have in terms of wage growth? Well first of all, you have lower wage workers gaining jobs, right? higher paid workers losing jobs. What does that do? It lowers the average pay right? You have the Atlanta tracker wage tracker showing disinflation for wages you have Chipotle Talking about how much easier it is You have this massive Wall Street Journal piece on health care and restaurants talking about how it's easier to hire You have Starbucks Talking about how it's easier to hire you have Lyft Basically saying yeah, we suck at Lyft because we can't charge high prices anymore because there is no peak pricing anymore because we have an extreme shift in labor availability. The supply of labor has just exploded.

Okay, so you have this insane like mainstream media narrative that oh my. God the Jobs Report is so terrible because lots of people got jobs, the Fed's gonna kill us. Meanwhile what you actually have is what is Jerome Powell Actually saying J-pal's like this is great, People are getting jobs and inflation is going down like he's not wrong. This is good.

So anybody you hear that's bitching about jobs, uh, ruining the the stock market in the future In my opinion, it's not what we're seeing Now, don't get me wrong, this is not to say that every company in the S P 500 is going to Boom In fact, consumers are under a lot of stress right now. That indicates potentially lower EPS But this portion this talk is about jobs. It's not about the consumer. We'll talk about the consumers a different time.

But if we're just looking at jobs and what the jobs Market is telling us is bullish. Bullish bullish. That's what that's telling us again. I'm not saying companies aren't going to miss on earnings.

There is a reason I have a very large exposure to semiconductor stocks, pricing, power stocks, and companies like Tesla Because I believe these companies are going to grow EPS substantially Stay away from the memory chip companies. but these companies are, in my opinion, expected to grow EPS substantially whereas your consumer you're more consumer discretionary stocks. The Super's getting hit Okay, but again, when it comes to wages, this is fantastic information and fantastic news. That's my take.

You heard it here. I Don't know who else is talking about this, but I Wouldn't be surprised if after now we make this video because this is always what happens. People watch my videos and then they go make their own videos using my data. It's okay, it's an honor, but it's also sometimes a little frustrating.

but that's okay because nobody else does research.