Facebook Parent Meta Platforms is planning another round of layoffs. 7 000 positions will be eliminated. The FED is not happy to see the unemployment rate at 3.4 Fed officials came out and said we're not done yet. What's up guys? It's Graham here, so you want to hear something unbelievable.

There have been more Tech layoffs in just the last few months than the entirety of the 2020 pandemic. More than a hundred thousand people lost their job in January alone, and these numbers are only expected to get worse with more layoff announcements happening every single day. And the worrying part is that this is not just related to Tech with Bank of America warning that the United States will begin losing 175 000 jobs per month starting. Now That's why we really have to talk about which employees are most likely to be affected throughout 2023, why the historically low unemployment rate could actually be wrong, and what you could do about this to make sure you're in the best position possible to stay employed and make money on this episode of even the Ocean Is feeling the impact of the Federal Reserve Although before we start, if you're ever interested in hearing about these Topics in more depth than I can include in a YouTube video Feel Free to include yourself on my newsletter in the pinned comment of the video.

it's totally free and I'm usually able to go into a lot more detail there than that I can hear or you could subscribe so I could keep you updated on the market three times a week. so thank you so much. And now with that said, let's begin all right now. First of all, what many people don't understand is that the unemployment rate doesn't just tell us how many people are without a job.

Instead, it serves as an indicator for almost everything from stock prices, inflation, economic growth, and even how much money you're likely to make over the next 10 years, which we'll cover shortly. But this is where things get interesting. The unemployment rate was originally introduced in 1930 and simply measured people who are out of work, able to work and searching for a job, or those who are out of work though not yet searching for a new job. However, there is a problem because they didn't measure people who are working part-time but desired more work, which left out a huge portion of the economy that was barely making enough to survive.

Because of that, the survey expanded more to increase its accuracy and as you can see throughout Each decade, more and more detail and nuances included to measure exactly how and why people are no longer working. Which brings us to today. As of now, being unemployed is defined as those who do not have a job, have actively looked for work in the prior four weeks and are available to work, which as you would expect, leaves a lot of situations out there that are excluded including part-time work, sickness, retirement, and more So, because of that, the unemployment rate is calculated way differently than you would expect, and in a way it's kind of wrong to start. I'd like to thank Patrick David for bringing these points to my attention.

I'll link to his full video down below in the description for anyone who wants to hear his thoughts. But as far as how the unemployment rate is calculated, there are six numbers to look at. First we have U1 which calculates how many people have been unemployed for 15 weeks or longer. From there, you have U2 which is not the band that counts people who have completed temporary work or recently lost their jobs, and then you have the employment number that we all know and hear about U3, which is the total amount unemployed as a percentage of the civilian.

Workforce However, the problem is that this figure does not take into account other other situations where the person might be working part-time but wants full-time work or those who are no longer looking because the opportunity isn't available. That's why they've created U4, which includes the previous three and those who have given up or have not looked for jobs in the last four weeks. We also have U5, which includes everything above and those who are marginally attached, which are those not in the labor force but who want to work and have looked for jobs in the last 12 months but are not counted because they haven't looked for jobs in the last four weeks. and finally, you have U6 which includes everything that we've just talked about so far, plus part-time or underemployed workers who want to work full-time but can't because of economic reasons.

Because of that, many economists believe that they use six. Unemployment rate is actually a much more accurate reflection of our economy since it includes a broader range of people in situations. And when you begin to consider that number, the true unemployment rate of our economy is closer to 7.3 percent than the headline 3.4 percent that many people tend to believe. So why are rising layoffs becoming more and more common? And it's just something to actually worry about? Well, for the most part, the unemployment rate affects literally everybody, including you.

Yes, talking about you right now. If you don't believe me, it all starts here. It might sound common sense, but the more people who are unemployed, the less disposable income and spending power they have. And as a result, the less economic growth we see.

To make matters worse, the less economic growth that we see, the more likely we are to continue seeing layoffs as those companies no longer have the revenue to support higher wages, which in turn could lead to a recession or I guess more. Simply put, the more people who are unemployed, the more likely we are to see even more people unemployed. It's also said that over 70 percent of what the US economy produces is purchased by domestic consumers through their personal consumption habits. And if they're unemployed, it's very likely that the companies we invest in will begin to slow down and their stock price decreases.

This is also an important indicator that the Federal Reserve uses to determine their future rate hikes. After all, their goal is to dampen inflation, not create Country-Wide job losses. and Jerome Powell even said himself that more raid hikes were likely because the unemployment rate was so low and could withstand the increase, which in turn could cause stock prices to fall even further. However, another indicator to look at alongside employment is what's referred to as the participation rate, which calculates what percentage of the working aged people from 15 to 64 years old are either actively working or looking for a job.

And when you begin looking at the data, you'll begin to realize that we're seeing the lowest participation rate throughout the U.S Economy Since the 1970s, that means is people either H out of the workforce, retire or choose not to work, less revenues generated, fewer services are needed to end the economy slows down. So that then leads the question: how will this directly affect you? To start, it's said that such a low unemployment rate is a rent player, that the economy is overheating with fast price and wage increases that are unavoidable. But even more concerning is that besides the 1950s, after World War II, the unemployment rate has never been able to sustain a level below three and a half percent for more than a year. Just take a look at the data when unemployment was at its lowest in 1953.

High Inflation caused a recession that more than doubled the unemployment rate. The same occurred in 1958 and 1969 when interest rates were increased. The 1970s and 1980s recessions were also caused by an era of high inflation, high unemployment, and Rising rates. while the 1990 saw a time of restrictive Federal Reserve policies to thousands saw the burst of the.com Bubble 2008 sent us into the Great Financial Crisis, and now here we are, again, with similar qualities to every other recession before us.

It's also quite interesting that as inflation slows down, unemployment typically goes up as shown throughout every year since 1949, most likely as a result of rising interest rates in an attempt to slow down growth, which is what we're seeing today. In fact, since 1955, the U.S economy has always experienced a recession within two years from every quarter in which inflation was above four percent and unemployment was below five percent as the they are today. To make matters worse, the average worker saw a six to seven percent income loss for every one percentage Point increase in the unemployment rate. So even though you might believe your job to be completely safe, statistically, you're likely to also make less money as companies scale back like even Tim Cook Had to take a 40 pay cut in 2023, so now he's only going to make 49 million dollars this year.

And if that's not discouraging enough, it's also said that the current slowdown means that many workers will have to accept lower quality jobs often at very low Pace sometimes with insufficient hours. So that then leads the question: Why is this happening? How do you best protect yourself and which Industries are seeing the biggest declines? Well, on the surface, it said that multiple companies have blamed overly optimistic projections While Others said that treating pandemic level habits is permanent. acceleration had led them astray, or in other words, they hired too much when interest rates were low and they had to scale back when the endless money printer stopped and stop They have every single day, hundreds or sometimes even thousands of people are being laid off across Industries But some like Goldman Sachs believed that the recent round of corporate layoffs is a ripple, not a wave, even though they've started their largest round of layoffs since the great Financial crisis. But rest assured they said that this was merely a response to early signs of weak demands that are likely to appear elsewhere.

They also reiterate that not every layoff translates into a lasting increase in unemployment because most workers find new jobs while Arc invest. Kathy Wood says that artificial intelligence is actually leading to more productivity, with companies like Amazon being able to automate their infrastructure while they add thousands of robots a day. So in terms of what you could actually do about this, here's what I think from a business perspective, this seems to be the time where many companies are trimming the fat, optimizing their Workforce adjusting to new conditions, and making sure they're in the best position possible to make a profit. And unfortunately that comes at the expense of workers.

For shareholders, though, all of this seems to be celebrated because at the end of the day it means a boost to the company's bottom line. And that may means their share price increases, but for their employees, it seems to be a survival of the fittest mentality where only the top talent is retained and probably under tougher conditions. In a way, This is how the Federal Reserve is able to tame inflation and with less money chasing a higher supply of goods, prices will decrease. This also explains why unemployment is always so low at the peak of the market, with loose monetary policy that allows businesses to over expand and then as soon as that reverses, unemployment begins going back up.

As far as what you could do about all of this, my honest advice is to make yourself as indispensable as possible. Now is absolutely not a time to be complacent, fly under the radar and hope they don't notice you watching YouTube videos even though that might work temporarily. If and when we see a downturn, that job could be at risk and you would have been much better off making yourself so good at what you do that they couldn't possibly let you go after all Google Previously said word for word that we need to be more entrepreneurial, working with greater urgency, sharper focus, and more or hunger than we've shown on sunnier days. And I agree We're no longer working in an environment where people are rewarded for simply showing up and now is the time to double down on everything you're doing to ensure the best job.

Security: So with that said, you guys thank you so much for watching As always, feel free to add me on Instagram And don't forget that you're able to get a free stock with your sponsor Public.com Down Below in the description with the code Graham because that could be worth all the way up to a thousand dollars. Let me know what you think. Thank you so much for watching and until next time.