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- [00:00]
A
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B
news across America without commercial interruption, we report on the American labor economy. We are going to extend our discussion with Dr. Sam after seeing this jawed up, jaw dropping report. Peter Scheer looks like a genius right now with us an hour ago. Futures explode up 23. Dow futures up 164. The Nasdaq up half a percent in the VIX comes into a new low, 16.14. We're going to get a 15 VIX here in a moment. Over on the Sweeney front, the two year yield comes in. All of a sudden rate increases. What do you think? Paul?
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C
Feels like they pushed out a little bit here. A little bit. The two year comes in about four and a half basis points 4.12%.
- [01:18]
B
Looking at the data here, we're going to give Dr. Sam time to digest. It is she does. Claims were steady here on a compressed Thursday Friday wall of data. Continuing claims are depressed as well. Hourly earnings on target, the unemployment rate, as John Tucker said and all that complex math improves from 4.3 to 4.2%. But it is the revisions. That's what I want to focus with. Dr. Saman, we are thrilled from New Century. Claudia Sam is with us for this important report. Again, futures up 23. Claudia, there's nonfarm payrolls and there's two month net revision which gives me a negative statistic. And then we have six months or every year other adjustments. We continue to over guess our labor enthusiasm. Does it surprise you to see a two month net revision that's negative?
- [02:18]
D
I wouldn't say it's surprising. I mean, you know, revisions are a natural part of the process. We want to get a snapshot on the US economy as quickly as possible with over 150 million workers and tens of millions of businesses like you don't do that in two weeks on the first try. So the revisions are part of the process getting a clearer and clearer picture. So I, you know, I kind of push back on that. There's a, you know the system's broken. We're always going to get these kind of revisions. We've seen some upward revisions recently too. So you know, I think there were some things maybe that were a little puzzling in say last month's data. Some, you know, big jump in government employment and so like things it takes some time to work out the numbers. So I wouldn't, I wouldn't take too from it. It just all this underscores again, don't get too hung up on the latest number. Look at averages, look under the hood. I think that's a consistent nonfarm.
- [03:08]
B
Payrolls was 188,000 three month moving average. That comes down almost 20,064. So that drops down to three months moving average and the new three months moving average is 111,000 and that'll adjust to. Dr. Sam is that politically acceptable in America to have a 90 day moving average of 111,000?
- [03:35]
D
What really matters is that the people out there who are looking for jobs can get jobs and they're good jobs. Right. So the payrolls are kind of a tricky way to read that just because we can have changes in how many people are out there looking for jobs. I still feel like the unemployment rate is a better place to start that conversation than the payroll numbers though. Of course. I mean the difference is like it matters to people. Even if you're in the four point, you know, 4.3, 4.2% isn't a lot of unemployed but if you're one of those, it's a big deal. Right. So you're going to and that may affect your vote. So but I think payrolls is a tough one. And I will say even with the number the three month moving average of payrolls being revised down, that's still well above what estimates were of what we think the labor force is growing at. So that could still be a good number.
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B
Yeah, I'm just, you know, Claudia's so young and you Sweeney, you know, you're just a kid and the answer is 111,000 is un American. We're supposed to be vibrant at 150, 200, 210 and those days are just evaporated.
- [04:37]
C
Claudia, how do you think our new Fed chairman and the Federal Reserve is going to view this, this data point,
- [04:45]
D
this today's report is going to keep their focus squarely on inflation. So there, I mean, you know what you're looking for, red flags, downside risks. And this, this doesn' shows signs of it. I think the one place that I find somewhat disconcerting Is, you know the unemployment rate did tick down to 4.2% but it came with a 310 decline in the labor force participation rate. And so that's, you know, people can retire, people can go and you know, the changes, that's not a thing the Fed gets involved with. But, but that, that does give me a little bit of concern just about the again the structure of the labor is the workforce that's out there. So you know, I think they'll keep a watchful eye on this. But this, I don't see red flags in this in terms of them turning and the problems in the labor market.
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B
We welcome all of you across America for this American labor economy. A shock report here. Futures up 21, up 25 now. Futures explode up 32. Dow futures up well over 200 points. The Nasdaq puts it on up 210 of a percent is now excuse me, I check that. Up 210 of a percent now up 710 of a percent in the Nasdaq 100. The Vix. I've got a 15 handle on the Vix. There you go, 15.98 plunging now that'll go through the July 1 nirvana that we saw the other day. Paul Sweeney with Dr. Claudia Some.
- [06:06]
C
Claudia, we've seen a real dramatic decline in immigration into this country. How does that impact kind of the supply side of the labor market these days?
- [06:19]
D
Well, industries that have, you know, rely a lot on immigrant workforce that can, can cause labor shortages. We haven't seen that kind of at an aggregate level. I think you can point to some industries where you can see some tensions and even, even showing up. It could be part of the contribution to you know, construction wages rising faster than overall. But there are other reasons construction wage be rising faster. There's a lot of demand for a build out so it's hard to like pull it out in the aggregate statistics. But I think there are, there are hints of it in the, in industry level and then you know, this, this can get a little complicated in terms of the measurement and the data. People need to be willing to participate in government surveys so we can understand their employment. I do worry kind of the crackdown in immigration may be impairing the statistics some as well.
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B
So what will the Fed do? I got eight ways to go here, Claudia, in the time we've got left. Kathy Kaminsky on hold right now. We'll get to her in a moment. Perfect time to talk to Catherine Kaminsky about the quant view on the market. Dr. Sum, the Fed here. I guess we've got a belief, and I'll call it collegial dissent. We need to raise rates. A major Wall street shop looks for three rate increases, etc. How abrupt over this holiday weekend will be the market economic shift given this report relating to Fed meetings for the rest of the year,
- [07:48]
D
I don't think markets should react much to this report. I mean, we have a Fed that has committed to delivering price stability, which is getting inflation back to 2% over some period of time. What's it going to take to get it back to 2%? And there is disagreement among the committee about what it's going to take. And today's data does not settle that that argument at all. We're just going to need a lot more information, so have a nice weekend.
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E
There we go.
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B
Let's leave it at that. How's the cat doing? Did the cat survive the one year old cat food you served?
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D
She's right over here looking out the window. Puffy is good too. She's having a good weekend.
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B
Puffy's having a good week. And stay cool, calm and collected. Puffy Claudia Sam, we really treasure your work for us and your wisdom for us each and every jobs day. Can't say enough about it. With new Sentry advisors.
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