Unemployment claims. But in addition to that, we need to talk about what you need to know going into a Friday March 10th Because the actual BLS which should just be shortened to BS You know Bureau Statistics Yes, Anyway, Bureau of Labor Statistics releases their jobs report tomorrow at 5 30 a.m Pacific Time 8 30 A.m eastern time I will be covering it live so make sure you tune in to the meet. Kevin Channel But I'm going to give you the Bloomberg estimates right now and I'll also give you some Wall Street estimates for what to expect going into the labor report tomorrow. This is a big deal I Want to prep you for it? but first, let me just cover that.

Yes, we did end up getting initial claims today that were actually dare I say bullish for the market This is not a good thing for individuals I Want to be very clear I sympathize with anybody losing their job I Don't think it's fantastic for people to lose their jobs. It is unfortunate that going into recessionary environments unfortunately, the likelihood of people losing their jobs increases, right? That's sad. But anyway, so what happened today? Hey, this video is brought to you by me. My courses on building your wealth linked down below where you can learn everything from tax benefits to investing with an LLC or not using an LLC insurances, how to negotiate with real estate agents and vendors and contractors, or even your boss.

build more wealth by understanding the perspective of what you're not taught in school. All linked down below: Extremely affordable prices and you can now use the Saint Patty's coupon linked below. Well, today we got initial jobless claims that came in at the expectation was 195 000. the prior read was 190 000 in claims sitting below 2000 is Uh is or sorry.

Two hundred thousand is still showing a pretty strong labor market. We did just finally come in with claims of 211 211 000. That is, Uh, more jobless claims than expected by about six ish percent. That's actually good news for markets.

You do have continuing claims that came in higher than expected as well. continuing claims coming in over Uh 1.7 million. Continuing claims? We're sitting at. Uh, the actual number here 1.718 The expectation was 1.660 Now what I'd also like to tell you is the revision.

The prior read was 1655 That was actually slightly revised down to 1649. Barely a revision. Barely a revision. Probably not worth talking about because it's so nominal.

What's more important is that we actually beat the survey today with higher continuing claims. Uh, it. and again. This is what the Federal Reserve is trying to engineer, right? So the sooner we get job loss, the sooner we could say okay, we're in a recession and the sooner we could get over this now.

I Hate to say it, but it's kind of like ripping off a bandage right now. It just feels like we're kind of like peeling up the edge of the bandage and we're just like a child. We're like, man, it's like I Don't know why mommy put a bandage on like the hairy part of my arm. You know it's like you're kind of feeling it up.

It's like it hurts, it hurts, it hurts. It's like somebody just needs to come along and go quick. It's like ah uh, but but nobody, nobody wants to because it's just it's painful, right? So we're just kind of sitting here going. huh? Well, maybe if we just keep healing it eventually it'll go away and maybe it'll hurt less in aggregate, but it'll be.

It'll be more annoying for the longer period of time. I Somewhat feel like that's what's going on with the economy if we had to compare it to a crusty bandage, uh, maybe just take a few showers and it'll just just wash off. But anyway, tomorrow's numbers very important. So last month in January we had an absolutely insane read from uh, the labor report.

We had 517 000 jobs. Now that 517 000 jobs was expected to be mostly a joke. uh, dare I say a joke. But it was.

It was terrible. We had Barons basically tell us the uh, seasonal adjustments for January were so ridiculous that, uh, really, you can't put any weight on the January data that we ended up getting because of how different the environment is this January compared to really any of the januaries we've had in the past now I Don't want to come across as suggesting that this time is different I mean every single year January is considered seasonal adjustment month. But bottom line: Barons is basically saying the Bureau of Labor Statistics was expecting us to lose somewhere around 2.8 million jobs in January compared to December whereas usually we lose somewhere around 2.3 million jobs so that the bar for for job loss was was actually set so much higher that when we got the actual jobless report the unemployment report, the numbers came in so much stronger. Thanks to this insane seasonal adjustment and the potential excuses for that are one labor hoarding that is more companies saying look I still have enough money to where maybe I can sustain through the recession.

It's been so hard for me to hire people I'm going to keep people rather than being super reflective or responsive to the market where as soon as things slow down I start firing because people are somewhere shell-shocked and they don't necessarily want to start firing people because it's been so painful to hire them in the first place and in some cases so expensive to hire people in the first place so they don't want to go through that kind of garbage again. Anyway, the seasonal adjustments for January are expected to suffer from Big revisions as well. So what? I One of the big things I'm looking forward to tomorrow is not only am I going to look at what happened with the actual numbers tomorrow which I'll give you the survey for in just a moment, but I'm actually going to look at the revision. So the survey for tomorrow and changing non-farm payroll is 225 000.

that's a that's basically half of what we had before at 517 000. but I really want to pay attention to obviously. Best case for the market that comes in soft right change in non-farm payrolls if it comes in lower that is less people got new jobs from 225. If we get something like what, Wall Street is more expecting like uh, Barclays JP Morgan Most Wall Street firms are expecting somewhere between 190 to 200, although the firms surveyed by Blue Bloomberg have an aggregate estimate of around 225 000.

So let me say the firms that I'm reading reports for Wall Street Let me clarify that are suggesting 190 to 200 the Bloomberg consensus which is many more different firms, they're sitting at 225. Obviously, if that comes in lower, it'll be bullish. Because it'll it'll show. Okay, all right, finally, the Fed's work is starting to have an effect.

Maybe that means if the Fed's work is starting to have an effect January was just an anomaly. And maybe just maybe the FED can slow down their rate increases. Because finally, their rate hikes are starting to impact the market. That's a big deal.

Markets are waiting desperately for evidence that the Federal Reserve's rate hikes are actually affecting the market. Worst case scenario, you end up getting a Kenny G response where basically the Federal Reserve is hiking, but the market keeps growing. That is, the economy keeps growing, people keep adding jobs, and we actually get a strong jobs report. Like if tomorrow we got something like a 250 or 300 000 jobs report.

People are gonna freak I Think you're just going to get a straight down in the stock market because what's going to happen is you're going to build up so much fear that oh my gosh, January is a reanimation of the economy. It's like a zombie that's getting up again and and the fed's been trying to shoot it with a shotgun over and over again. It's been trying to double tap, but the damn zombie keeps getting up and they're like fine. I Guess we have to put in maybe some incendiary rounds.

In other words, we got it. We gotta raise the rate. Uh, the you know the Federal Reserve This can rate even more Fed funds, right? Uh, and and that would then reflect in lower stock and asset prices because that's what we do as our expectations for the FED funds rate go up. Stock market goes down.

Now It's been relatively resilient. The fact that we've gone from 4.9 on a terminal rate to 5.6 and if you know, only slightly traded down on markets is phenomenal. It really suggests that markets are more fearful of Paul Volcker than they are of a slightly increasing Fed funds rate that's higher for longer. That's really what the market is telling you right now.

But boy, if we get a bad jobs report tomorrow, we're going straight down. We're going straight down because it's suggesting that January was not a seasonal adjustment anomaly. It suggests that oh good lord, the zombie is back up. The Fed's going to have to get a lot more aggressive than anybody is expecting.

We can't give February that same seasonal adjustment excuse. So February's hot. It's bad news. Depending on how hot it is, is going to be really interesting.

Now, keep in mind the the only leftover excuse if we get a bad report tomorrow for for the jobs report would be that, well, I mean unemployment is lagging. Okay, yeah, everybody knows that unemployment is like, well, not everybody. Some people still think unemployment is a leading indicator, which is insane. Unemployment is a substantially lagging indicator.

and and so the only leftover excuse if we get a hot Jobs report tomorrow is that Well, you know it's a lagging indicator. That'd be the only leftover excuse. But but really, the bull argument would start looking very, very weak if that were the case, right? Uh, and loading up the incendiary rounds to the door on an online raid? Rust references. Anyway, So uh, the surveys 225 for non-farm payrolls, The unemployment rate is expected to hold stable at 3.4 percent.

Here's another very important statistic: The change in average hourly earnings. This is going to be a very big deal. Uh, it's going to be one of the first things I look for at that unemployment report tomorrow. is that change in average hourly earnings? Because this is where we look at what's known as an average hourly Earnings Wage Price Spiral Induction in English If people keep getting paid more money month of a month.

In other words, people got paid more money in February than they were making in January Well, hot damn it clearly means people were given the Jerome Powell a big middle finger. He gonna have to do a whole lot more to hurt us. That's it. Just didn't like.

simple plain English Here Uh, 0.3 is the expectation that annualizes and please remember it's not an exponential function. it is just multiplied by 12. Point: It's not like genius math. Okay, this is very simple.

If the expectation is 0.3 it means the annualized annualized rate of inflation. The speed we are traveling at not compounded, just the speed we're traveling at. It's three point six percent for wage increases that is obviously still higher than expected. So like, best case scenario, tomorrow we get some kind of unemployment report that says uh, you know we get 200 000 new jobs or less.

A one handle would be like sexy and beautiful and a turn on. Uh, this is what happens when you're in finance all day long. Those are the references you make. But anyway.

uh, average hourly earnings? Uh, move from Uh, if if we can get instead of a 0.3 anything below that like I'll take a point two all day long I'm not even gonna ask for anything lower than that. I'll gladly take a point too. That would be very, very delicio. Show.

Now do note that the average hourly earnings year over year expected to step up from 4.4 to 4.7 percent. but that does not matter so terribly much as the actual average hourly earnings coming down on a month or month basis. That is going to matter more again. Survey Point Three Now, uh, average weekly hours worked is expected to slightly tick down again to 34.6 The lower average hourly, uh, average hours worked per week comes in the better for the markets because the lower that number is.

Again, the survey is 34.6 down from 34.7 less. the lower that is the indication is the softer the economy is and the less demands there are on workers to work harder longer longers actually the the precise way to put that. Uh, now that's an indication. You know if it comes in too low then it's a sign that oh no, the recession could be worse, right? But really, we we so so we we have to have a very balanced report where it comes in some off but not not so soft on average hourly Works hours worked average weekly hours worked because that signals recessionary fears, right? So like it could come in too low.

where it's like oh my. God recession Labor force participation rate is expected to be stable at 62.4 percent I Still think it's remarkable that the average hours worked is only like 32 percent I I don't I have no idea who only works 32 hours? uh, or 34 hours? Whatever. It's like no difference at that point. whoever that is I'm I'm very jealous.

Uh yeah anyway, but uh, one of the things that I do think is very interesting as a potential impetus for, uh, actually potentially higher labor reports That is more jobs being created and potentially less inflation for wages. Now this is this is crazy. Think about what I just said. more jobs created but less inflation? Okay, well, how does that work? Well, what it means is if we continue to get more Leisure and hospitality and Airline hiring air travel Services Hotel Whatever.

If we continue to get more hiring in that sector, we're going to see a higher Jobs report. but if more people are available. Best case scenario here's like your your ultimate best case scenario, right? You get a a consistent with survey jobs report A lot of those jobs are in retail and hospitality and travel, but the average pay is going down or or like the increase, the rate of increase is going down right. People aren't making less money, they're just making more money at a slower growth rate, right? But here's something very interesting.

Take a look at this. This right here is uh, an article on more Women rejoin the Workforce Lifting the Economy Now I Think this is really interesting because the article goes through and talks about how American women are staging a return to the workforce and this is actually helping Propel the economy Now this is actually really good because if households look, let's just be clear here: a lot of women and this is not I'm not. And nowhere in this video do I want to be considered sexist. uh, or or somehow like trying to make an argument about men versus women.

This is not a political video, this is just Financial Fact Financial Fact is that more women stayed home to take care of children during the pandemic because Child Care was either condemned, unsafe, or unavailable. Now there are a lot of single working households. Because we are potentially going into a recessionary environment, more women may go back to work and this is not to say that women don't have hard work when they're at home. Okay I want to be very clear about that I Highly respect people who take care of children all day long because while I can take care of children, maybe all day long once a week, I ain't gonna do it every single day.

It's a very difficult job anyway. Uh, so what do you have over here? Women have gained more jobs than men for four months straight, including January's hiring search, pushing them to about 49.8 percent of all jobs created. Female workers last edged higher than men on U.S payrolls in late 2019 before the Pandemic sent nearly 12 million women out of work, compared to 11 uh, sorry, 10 million for men. Even as job opportunities grew a little a year later, nearly 1.5 fewer million fewer mothers were actively in the labor force in March of 21, then in February of 2020 amid Child Care disruptions and health concerns, virtual schooling, daycare closures, blah blah blah blah, the workforce is powering the economy's underlying source of strength.

See now this is very important. If people are going back to work and they have more household income, then they could actually sustain economic growth. AKA Positive GDP Spend. Which means no recession because more women going back to work to supplement men who are losing their job or are making less money or not enough money to sustain because of inflation that we've experienced means maybe we could.

Actually, the more women go back to work, the less likely we end up having a recession. Now that's actually really an interesting idea. for now. Demand remains strong, women hold 66 percent of all jobs in Leisure and Hospitality that compares to like Tech where it's more men.

But anyway, women's employment in these sectors grew by 719 000 in the six months ending. January Uh, accounting for 38 of all private sector jobs. Men account for a dominant share of jobs in smaller sectors such as Transportation warehousing, manufacturing and construction, and the tech heavy sector. But what's suffering from layoffs? Well, Tech is suffering from layoffs.

Men, uh, take up roughly 60 percent of tech jobs Warehouse Manufacturing construction. These areas are seeing a Slowdown but where do you see a pickup? Well Leisure Hospitality Educational Education Health and other services. In other words, the services sector where inflation is still strong is where women are actually picking up more jobs. Now this is actually very interesting because again, it means we could actually be seeing a higher jobs report as more women take more jobs.

however, more availability of Labor Supply also potentially aligns with less Uh inflationary pressures on being forced to pay people more money. In other words, and this sounds terrible. Okay, but it's from a finance point of view, but in other words, more women going back to work means wages are not going up as fast, which means more income for people which sustains as potentially out of a recession or out of a deep recession which potentially sustains earnings at companies. But it also helps us remove the risk of a wage price spiral.

Remember a lot of these: Services Industries are still behind well below trend for employment growth because of the pandemic. Healthcare is back to 2019 levels, but we should have another 900 000 jobs in health care if it hadn't been for the pandemic because so many people were tired or whatever. So uh, here's just sort of an anecdote. If you think there's going to be a recession and realize your husband or partner is in a highly sensitive sector, you might decide.

well I better try to work more and not quit or just get a job in the first place. Nurse saying blah blah blah blah article goes on: A job paying ten dollars an hour might not be attractive for women struggling with school schedules. An economics professor says, but if the same job starts at 15 16 per hour and offers benefits, she might take it. Uh, interesting I Found I'm in a much okay.

Here's just sort of an anecdote of a woman who says you know I feel more value in my life when I go in and add value at a job and then I go home to add value to my family rather than solely being with with kids all day long. But but anyway, uh yeah, it's very interesting and again this this is not. This is not an argument about, you know the the gender, pay disparities or whatever. Uh, you know again it's not designed to be a political video here.

This, this is just fact. But the fact of the matter is this is fantastic news, right? More income for households means a shallower recession. It means less EPS pain for companies, which is a big fear of markets right now. And it potentially also means more.

uh uh. likelihood that we're able to avoid a Paul Volcker? uh Rock pull from the Federal Reserve because uh, of uh of a lack of a wage price spiral impetus. So this is actually all fantastic news. I Expect a lot of insight tomorrow from the Labor Report Again, that's at 5 30 A.m Pacific Time 8 30 A.m eastern time I will be live streaming it.

Uh, live. Just like I Live stream every morning. Hopefully you'll join me for sort of the day's Finance news every morning.