Total Nonfarm Employees

Hey everyone and thanks for jumping back Into the macroverse today we're going to Talk about total non-farm employees and How you can use this to look at the odds Of a recession if you guys like the Content make sure you subscribe to the Channel give the video a thumbs up and Also check out into the cryptiverse Premium at into the Let's go ahead and jump in so we've Talked before about the overlying risk Of a recession we're not saying we're You know in one right now we didn't say We were in one in 2022 it's just that There is a risk of it occurring we Always want to understand what that risk Is right it's not to say anything is Definitive it's just there is a risk of A recession and what are some metrics That we can look at to help us better Understand if we are in a recession or Not and you might wonder what's the Point of really knowing looking at an Indicator to tell us whether in a Recession or not the reason is because You know by the time a recession is Declared it can often be well after the Bottom is already in if if you know if There is one right so if there is a Recession by the time it's declared it It comes so much later that it's hard to Really you know it's hard to really say Oh well if it comes a year later who Really cares but there is this metric I

Think it's somewhat interesting so if You look at the total non-farm employees And you look at at you know where the Recessions occur what you'll notice if You look at the monthly change when this Goes negative that's where the recession Occurs right so it's a basically it Shows you how the economy is doing like Are people employed are they working are They not but when this typically goes Negative you see that's where a Recession occurs right time and time Again if it goes negative that's where You're getting the recession and if you Look at even recent times right back in In the financial crisis once this goes Negative that's where the recession Occurs if you look at it in Crash again when it goes negative right Here the monthly change that's where You're looking at at a recession and so That it raises the question well where Is it today right where where is it Today is it turning in the right Direction in terms of trying to avoid a Recession or is it trending in the Direction of a recession and what you Should look at I suppose is just take a Look at what's kind of been going on for The last year or so right so this topped Right here so the S P 500 topped back in January of 2022. Which coincidentally is also around the Time that total non-farm employees the

Monthly change you can see that's when It started to go down right and as this Goes down so two has the S P 500 trended Down now the zero line is right here Right so this is the zero line down here And remember it's the zero line right so When the monthly change goes below zero That's where the recession occurs and so The question that you have to ask Yourself is do you think the Federal Reserve by raising interest rates as Much as they have do you think they've Done enough damage to the economy that It's going to send this monthly change Below zero if the answer to that is yes If you think the answer to that is yes Then you're saying you think a recession Is coming and if you think your Recession is coming then that means There will likely be a panic stage at Some point if on the other hand you Think that the economy can absorb these Interest rate hikes but it won't have Any long-term long-term consequences Then you might say you don't think this Is going to go negative and that it will Actually avoid a recession so it's all About what you think I will remind you For you know if if you're thinking about Well how have the interest rate hikes Affected the economy so far one of the Things to remember is that interest rate Hikes can often take you know 9 to 12 Months before they're actually felt in

The economy and we're now getting close To sort of the one year anniversary of The of the First Rate hike during this You know during this downturn so I think We are going to start feeling the Effects of the rate hikes over the next Few months and the only question will be Is how big of a hit does it make to the Unemployment rate like how big of a hit Does it make and and you know where the Total non-form non-farm employees end up End up coming in so you know if you take A look at the trend right the trend is Important and you can see it hasn't been A monotonically you know it hasn't been Going down monotonically if you go look At January you know and again this is in Thousands of of persons right but if you Look at January it was 504 the monthly Change anyways right the monthly change Because we're looking at that monthly Change not just the metric it was 504 But then it jumped up to 714 and then Down to 398 368 386 293 537 but then all the way down to 292 269 263 256 and 223. so it's trending towards The zero line right it's turning towards It and the only question you must ask Yourself or one of the questions I think That you should ask yourself is Will it go below zero right will it Actually go below zero and if it does There's a good chance that was that

Would be where the recession actually Occurs and again if you think the Economy can withstand all these interest Rate hikes then you're probably more on The side of of thinking that it won't go Below the zero line and the reason why You know the reason why this is Important is is I you know if we look at It in the context say of the of Specifically the S P 500 and this is the Reason why it's important bear markets That do not include a recession I think On average last about like nine months Or so right so if we don't have a Recession then there's a better case to Make that this was the bottom right Because this would have been about nine Months or so but when we have recessions So we have when we have bear markets That include recessions and and again That's looking at something like this if It goes below the zero line When you have bear markets that include Recessions they tend to last more like You know a year and a half or something Right so they could they could go Another six to 12 months Beyond sort of The average length of a bear Market that Does not include a recession so that's The reason why you must ask yourself Whether you think we are heading towards A recession or not and again there's not A right answer I you know I follow a lot Of different

Um I follow a lot of different Indicators a lot of different people Talking about those indicators and There's not really a great consensus There's some people that think we're Going to avoid a recession there are Some people that think we will have a Recession but it'll be somewhat shallow And then there's there's those that Think will have a fairly deep and Long-lasting recession right so Depending on on what where you stand Will of course ultimately dictate Whether you think the bottom is n for Naught for traditional markets right so Again that is the risk right there's Always a risk on the market and of Course that is is the risk that Currently stands is is does the economy Ultimately go into a recession or does It avoid a recession and not go into it And show that the economy is actually Stronger so we've outlined the risks Involved and of course how that how that Pertains to the S P 500 note that the S P 500 is coming up here on some pretty Big resistance levels so I do think That's at least important to look out For to see if it actually breaks through Or if it doesn't and I mean if it Doesn't and and it just ends up being Another rejection and we come back down That doesn't even mean that you know I Mean we could come back down right

There's a potential right where we could Go up come back down and then still come Back up and then have to ask the same Question here in like two or three more Months right so again this has been Going on for a year now right we find Ourselves at the top of the trend line Once again and Um And of course all sorts of speculation Right as always as to um as to what that Ultimately leads us to what that Ultimately means but hopefully again the Uh looking at these macro metrics right The total non-farm employees Um is helpful to you in trying to Determine whether you think we're headed Towards a reception if you take a look At Trends from say prior Cycles you can Kind of see that it was it was sort of Slowly trending down and then once it Actually briefly went negative here Um and that was sort of finally where The market started to roll over and then Once it really went negative the market Ended up collapsing so that was in back In the financial crisis and then during crisis you can see here that it Peaked Then it came down and then the market Came down with it and then once it went Into that negative territory this is Ultimately where the um you know the the Recession actually occurred okay so

Again just another macro indicator we've Covered several of them just one more to Add to your toolkit again give the video A thumbs up if you guys like this Content if you guys like me talking About the macroverse make sure you Subscribe again check out into the Cryptographers premium I'll see you guys Next time bye


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