Jobs Report

Hey everyone and thanks for jumping back Into the macroverse Today we're going to talk about the most Recent jobs report and we're going to be Looking at job openings if you guys like The content make sure you subscribe to The channel give the video a thumbs up And also check out the sale on into the Cryptoverse premium at into the let's go ahead and jump In so about every month or so we we try To provide an update on the labor market Normally a couple of times a month I Suppose but we did get a recent jobs Report yesterday where we actually saw Total job openings or total non-farm job Openings drop by approximately 338 000 and while 338 000 might sound like a Lot it's actually a lot more than what We would have previously assumed because Last month I believe total non-farm job Openings were about at 9.58 million But that number was actually revised Down a lot and so it's more so we're Down 338 000 from that revision not from The initial number that we were given so With that said now that we have the Revised data and we have a new data Point which of course could get revised As well next month we can see that total Non-farm job openings are coming down Somewhat quickly now the reason we Follow this is because of course we are In a tightening cycle by the Federal

Reserve where they are aggressively Raising interest rates or at least they Have been aggressively raising interest Rates and they've been rolling off Assets from their balance sheet going Through quantitative tightening or QT And of course going through something Like this is bound to have an effect on The economy and you can see that in March of 2022 We can see the total job openings peaked Which is again right around the time That the FED started raising interest Rates now ever since then total non-farm Job openings have decreased from around 12.03 million to around 8.83 million so There has been something achieved here In in loosening up the labor market is Not as tight as it once was there used To be a ton of job openings and there Still are a lot but it is at least Coming down which of course is what the FED wants to see now one of the reasons That I've said that there was no Recession in 2022 and at least up to This point there has not been a Recession in 2023 is just because of how Much excess there has been sort of get Rid of you know if you look at at job Openings back in in the financial crisis The peak was you know below 5 million And you know I mean it sort of bottomed Out over here At around you know just above 2 million

Or so but again from these Heights it it Wasn't nearly as high I mean it was Actually lower you can see from where it Was back over in Era so this Number up here 12 million you know we've Seen job openings go down by more than 3 Million for total non-farm but there was Just so many open to begin with that It's taken us this long arguably just to Get back to the prior Trend so the issue Of course is If the Fed continues to Raise rates and or hold them at high Levels which is probably what they're Going to do at least hold them at high Levels we don't know yet if they're Going to raise again or not but there is At least a there has been a growing Probability of that happening as well The issue of course is if they if they Remain caucus for too long they could Push the the US economy into a recession But when you look at charts like this You can kind of understand why there Hasn't really been a recession yet it's Because there's just been so much excess So you could sort of draw an imaginary Trend line through here and see that all That has been accomplished so far is That we've just gotten back to trend So then the expectation or where we Might have to start to figure out Exactly how determined the FED is is by The end of this year and early 2024 That's where we'll finally get a glimpse

As to just how hawkish the FED is Willing to be how far are they willing To go to get inflation out my guess is They're gonna as Powell says they're Gonna stay at it they're going to stay The course until the job is done And and you know so far it's been Relatively simple because inflation has Been high And so their their Mandate of course uh Forces them they want they need to Achieve price stability and with Inflation high they have to raise rates They have to go through QT at this point The labor market their other mandate Maximum employment has not really been An issue because the unemployment rate Is still at historical lows as job Openings come down though the Unemployment rate could start to have a Lagged effect by the end of this year Early next year where it might start to Finally tick up some but again by Looking at charts like this we can Better understand why the U.S economy Has not been in a recession in 2022 and Why it hasn't been in a recession in 2023 is because so much of the the Effects that these rates have had have More or less just gotten total job total Non-farm job openings just back to the Prior Trend okay And if you were to look at say a Year-over-year percentage change

Normally when you would look at this it Would in fact be recessionary and of Course if we stay down here eventually It would become recessionary right it's Not just going down to these levels but It's also spending considerable amount Of time where job openings are being you Know sort of removed from the economy And the reason why that's the thing is Because there are people that are Getting laid off there have just been so Many job openings for them to sort of Theoretically go find a new job but as Job openings Disappear then it's going to be harder And harder for people to to find find More jobs if they you know if they do Get laid off and that's where a Recession could theoretically kick in But I mean again it might not become an Issue until next year for all we know it Could be later this year could be early Next year I don't really know but that At least does provide some visualization As to why the labor market has been Resilient if you look out at total Private job openings you can see that It's also been coming down it topped out Here Um in March at around 11.01 million and Now it's down to about 7.87 million so It is dropping relatively quickly we can Look at total government now government Jobs have actually been one of the main

Reasons that it's been so far elevated Um you know you can see the government Jobs haven't really skipped a beat here But this most recent print we would drop From around 1.12 million all the way Down to 962 000 which is a pretty big Drop and it's you know it looks to be Like the second lowest print Um you can see October 2022 was lower But it looks to be the second lowest Print uh you know basically since 2021 Perhaps so that of course is having an Effect you can look at state and local Which is very similar to what we've saw With government construction is is still Relatively stagnant it hasn't made a Huge move it is rolling over slightly Again but it is still you know at fairly Elevated levels All Things Considered And still arguably above Trend you know Again going back to total non-farm or Total private it sort of looks like We're just now getting back to Trend if You look at something like instruction It would still seem to reason that we're Still above Trend and so there's still You know more wiggle room in the in that Sector than there might be in some other Ones Manufacturing though is is getting Somewhat testy here because it's Arguably back to the prior Trend as well And again the issue is if it just were To stop here and slowly start turning

Back up then that could be akin to say a Soft Landing the issue is that interest Rate you know hikes and and QT all this Stuff that is a lag effect it's long and Variable lags and so we don't really Know how long it takes for all of these Interest rates to fully hit the economy And if there's if the last several Interest rates that have been carried Out have not hit the economy yet then it Stands to reason that this number could Continue to drop lower and then Theoretically go well below the prior Trend which is where it could obviously Become an issue and you can kind of see How we're still sort of on the prior Trend Um but you you get what three or four More prints get us to the end of the Year early next year you could start to Sort of imagine how it how it might Become a little bit more glaringly Obvious that it's starting to go below Trend but at this point still there Theoretically right on Trend durable Goods job openings still coming down Uh that one is is still arguably above Trend and you can see that it dropped by Around 15 000 uh looking at things like Month over month percentage change you Can see that these you know it's been Negative right Um you know negative 10 here negative Point six four nine percent negative

Eight percent negative six negative four Negative four negative four right so you Keep getting these negative four Percents right eventually it's going to Have an effect it's just again there's Been so much access that it's just Taking a long time for it to be removed If you look at things like non-durable Goods you can see that that's actually Been coming down a lot faster and Arguably that one is theoretically Already below Trend Um you know it's down to 202 000 and it Topped out back in April of 2021 at or May of 2021 at four hundred thousand so It's sort of been cut in half Approximately cut in half for for Non-durable good Goods Manufacturing job Openings so look at trade transportation And utilities we can see that it has Been slowly trending down but this most Recent month we actually saw it go up by About 43 000 job openings retail trade Uh has mostly been flat you could see it Was actually perfectly flat from you Know the last month Continuing on to professional and Business services that one actually had A pretty large drop off here over the Last month I mean it's down about 198 000 so it's down to 1.34 Million last Month it was actually around 1.53 Million the month before that it was at 1.7 million so if you were to look at

Say a month over month percentage change On professional and business services It's actually down to around negative 12.91 last month it was a negative 9.5 Percent and the month before that it was A negative 1.34 so it actually has been Somewhat accelerating recently uh so That is at least something to consider So if you go back to the normal Trend You can argue that that one is starting To potentially go below Trail and if we Get a few more months where it's Continuing this decrease then I think it Would be fair to say it's it's well Below Trend and and potentially you know Potentially entering into a recessionary Type environment education and Health Services job openings has ticked down Slightly about by about a hundred and Ten thousand job openings note that the Peak though was all the way up here at Well over you know at over 2.25 million Job openings 2.28 million so it still Has theoretically a long way to go still Some excess there to remove and if you Look at a health care and social Assistance still some you know still a Long way to go for that one Leisure and Hospitality that one is dropped uh but This last month it actually went back up By about 62 000 jobs art entertainment And Recreation went slightly up and Accommodation and Food Services Went slightly out but you know one of

The main ones that I think a lot of People are interested in total non-farm Uh seems to get one of the you know the Sort of the largest headlines again at Just sort of encapsulating a lot of Different things right 8.83 million Um and and down 338 000 from the revised Number remember we're referencing the Revised number from the actual number It's down I think maybe I don't remember Exactly what it was I think it was like 9.58 Million last time so let's just Call it 9.6 million and now it's end up At 8.9 so it might even be down 600 000 Jobs uh job openings from from the prior Print it's just that the prior print was Revised and therefore you know now it's Only you know quote-unquote only down 338 000 from from what the revised print Was but if the if the prior print had Not been revised it would be down Approximately I think by about 600 000 Job openings but again I mean you can See that the FED is is more or less Getting what they want I mean we are Seeing inflation go down we are seeing Job openings go down we're seeing the Loosening the softening of labor market Conditions the issue is not can they Accomplish this the issue is can they Accomplish it without getting a hard Landing and again history shows that Hard Landings uh are often a a likely Outcome for especially for aggressive

Fed tightening cycles and this is Arguably one of the most aggressive if Not the most aggressive and so I think We still need to be following this stuff To see if if it does slow down or if This stuff continues to accelerate Because if job openings continue to Accelerate to the downside then it means As these other companies lay people off Those people that get laid off don't Have the same you know potential to find Other jobs if a lot of these other Companies are no longer hiring and That's where you can see the Unemployment rate you know start to Start to move higher but hopefully this Video is useful to you I know these are Not the most riveting but I do think It's important to follow the labor Market because we know that the stock Market will respond whenever the Unemployment rate starts to sort of Slowly move up and it'll probably lead It actually it'll probably go down Before the unemployment rate uh starts To go up anyways if you guys like the Content make sure you subscribe to the Channel give the video a thumbs up and Again check out the sale on into the Crypto various premium at into the I'll see you next time Bye


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