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- [00:00]
A
Hey everybody, Tim Miller from the Bulwark here with my colleague jvl, author of the Triad newsletter, which you absolutely have to sign up for@the bulwark.com, it's the best daily newsletter going. And he wrote today on the disastrous jobs report coming out of the government. I talked about this a little bit on the pod with David French. But JBL's newsletter is so withering about the state of our economy and who's suffering that I felt like we needed to dig a little deeper. Just a level set for people who haven't seen it. Bls. Now remember we had fired Trump, Trump had fired Erica McIntar, who was the head of labor statistics last month and replaced her with this toady freak show who was there on January 6th. But that guy hasn't been confirmed yet. So we have kind of temporary deep state people here.
- [00:47]
B
Well, there was, there's been some news on him. Tim, did you see this?
- [00:50]
A
Yeah, he has a, he has a Twitter, an alt Twitter feed named after the vice president for segregationist George Wallace. Is that right?
- [00:59]
B
Yeah, he's a, he's a shitposter.
- [01:01]
A
Got it. You definitely want a shitposter in charge of something like labor statistics. Okay. You know, there's a place, there's a time and a place for shitposting. There are roles for shit posters. Podcast host maybe for example, Commissioner of labor statistics. Not as much.
- [01:16]
B
Anyway, director of FBI is a shitposter.
- [01:19]
A
That's true. It's a great point. So anyway, they put out this report. We'll see if anybody gets fired because of it. In short, we the only 22,000 new jobs last month. They revised some of the previous months, which is funny because the months that Erica was fired over, whoever is doing it now revised those down. They were actually worse than she said. And in June, the economy lost jobs according to BLS, and manufacturing jobs down 78,000. So at the biggest picture, we're looking at a pretty stagnant economy. And I want to get into some of the details. But jbl, what was your top line takeaway?
- [01:54]
B
Yeah, it's very bad. Um, and so it, it, it isn't just a one month thing. We've been trending down this way since January of 2025. It's hard to say what happened in January, what did happen in January. Um, but we've been moving downwards and job I was depressed, I remember pretty consistently ever since. And this again, the trends are bad this time. We, we missed expectations by a lot of um, analysts expecting 75,000 jobs added, we only got 22,000. We revised down what were already very bad jobs reports from June and July. July was revised up by just a couple, but June was revised down to its net negative. The total for the two months was down like 23,000 jobs. And when you look at it now, healthcare added 31,000 jobs. In August, we were net 22,000. Tim, that means that the rest of the country lost jobs. So if you don't work in health care, there's a chance that in your sector there are fewer jobs today than there were on August 1st. And I mean, I guess we have some good news though, because if I go by what I heard at the RFK hearing yesterday, we're going to have a lot more sick people in America. And so that's going to increase demand for healthcare services. And so maybe we can push those job numbers up in the coming months.
- [03:17]
A
That is great news. And also, you know, something that's not in this report is you have to think about the big influx of hiring at ice and we're gonna have to staff the prison camps where we're keeping the migrants. So if you're a prison guard or you're a former actor who decides that they want to moonlight tackling people just trying to do their jobs, you know, lawn mowing or whatever, then that could be an opportunity.
- [03:43]
B
Yeah, we have some growth sectors, Tim.
- [03:45]
A
Yeah, yeah. So the people that are serving the measles patients, you know, private prisons and, you know, and ice.
- [03:53]
B
There you go. Yeah. You could rebound a little when you look at, I mean, I'm, I'm obviously, I'm joking, but when you look at the data, it's very bad. Like the, the deeper you go into it, the worse it looks. The quits numbers, which are the quit. When the quit rate is high, that means that you're saying quit.
- [04:11]
A
Right. Like people quitting their job quit.
- [04:13]
B
People quitting their job. Right. And so when that number is high, that, that's actually a sign of health because it means that people think they can get better paying jobs. That has been stagnant for three or four months now. This is a sign that, like at the actual grassroots level of workers, people are feeling very anxious. And so this is a good, it's a good measure of not only like the actual state of the jobs market, but also of consumer sentiment and worker sentiment. We are seeing B of A just put out a chart today on looking at construction starts and construction spending. And that has sort of fallen off a cliff. This is an excellent, excellent predictor of Recessions. It's just an early indicator and I don't know, like, how could anybody possibly have predicted that? A guy who came into office promising to institute a. An economy wide disrupting regime of tariffs during a time of tremendous economic expansion during which the American economy was the envy of the world, and promising to increase government debt massively. How could anyone possibly have known that it would end this way?
- [05:19]
A
Tim, I'd throw a couple more things on top of that. What he promised to do. Massive cuts in federal worker hiring. So like we met, we unemployed a bunch of federal workers. And that's not even in here, by the way. A lot of those folks, their severance Elon gave them, remember the deal, it feels like years ago. That was early this year, the doge happened. But those expire in September. So there'll be another category of people, federal workers who become unemployed for anyone who haven't found alternative jobs, officially next month's report. And then so cut a lot of federal workers and then we expelled a lot of people from the country. I don't know if you're aware of this, but the migrants that are in the country that we're expelling, they also are consumers. Right? I know, it's interesting. Yeah. And we scared foreign people from coming to the country because they don't want get hassled at the airports. They don't accidentally get sent to El Salvador. So tourist money is down. So, yeah, I mean, I, I mean, I think. And that was all again, and I guess not scaring tourists away, but all of the rest of it were his stated plans for the economy.
- [06:25]
B
Yeah, yeah, this was, this was the plan. And again, it isn't a. This isn't like, oh, he really hid the football. This is. And it also isn't the case that he was campaigning in the midst of the dust bowl. Like, I, I just can't overstate this. This makes our friend Sarah very, very angry with me. But the American economy from 2021 to the end of 2024 was unbelievably good. The unemployment rate was at or below 4% for something like 37 straight months. We had like 12 months of inflation, which was bad inflation, but not like historically bad inflation. It was not 1970s, it was not Weimar Republic. And the Fed acted like with real alacrity. And by the time we got towards like summer of 2024, that had all been tamed to a degree where real wages were all had already leapfrogged the inflation costs. So like, everything was good. Everything was really, really good.
- [07:26]
A
For people who don't believe you, index for visual learners. For people who don't believe you, graphic design is your passion. You do a couple charts I'm gonna pull up here. We got the chart here. And this is month over month employment change. You can see if you look at the binding arrows, those, those bars are high.
- [07:43]
B
Number go up.
- [07:44]
A
People were hiring.
- [07:45]
B
Number go up.
- [07:46]
A
And then the Trump ones, you can see those arrows. Those bars are wee little, kind of like little penises.
- [07:50]
B
Number go down.
- [07:52]
A
Yeah, little micro penises. And then we have the unemployment rate as well, a little less dramatic. But you can see where Trump comes in and how it starts to come up. I want to focus on a couple of sectors in particular that have been hurt by the tariffs. I've been some chatter out there. My husband does food policy, so I get, he sends me, you know, updates from the ag reports and stuff. A lot of concerns out there among the farmers. The soybean exports numbers really bad. This also happened the first Trump administration, but Trump bailed them all out with a huge cash in infusion.
- [08:29]
B
Just paid them.
- [08:30]
A
Yeah. Unclear whether that'll be possible this time. I mean, the cash infusion was so huge. I don't want to understate it. The cash, the farmer bailout in Trump's first term was bigger than the one year operating cost of the Department of State. So it was not nothing. And. Yeah, so. So do you have any thoughts on that? And then also the tariffs are hitting some other kind of heartland companies, John Deere. We've got some bad, bad numbers out from. I'd like to hear your riff on that.
- [08:53]
B
Yeah, so I mean, my, this is the real question, like in the $64,000 question is, will Trump be able to loot the government to such a degree that he can make his people whole and only try to focus the effects of economic recession on the people who are his enemies? And I think most people assume that that's not possible. The world is too big, it's too interconnected that, you know, you push in the economy over here and something pops out over there. You. And I think that's probably right. But we have seen him do the same thing with the immigration enforcement. Right. It isn't Texas. Right. The Texas housing industry is not having all of their construction workers rounded up because that would drive up housing costs and be very difficult for Greg Abbott to explain. Instead it's like, yeah, we're going to go into D.C. and New York and Chicago and we're going to really, you know.
- [09:49]
A
Yeah.
- [09:49]
B
I mean, mess up those blue states.
- [09:50]
A
It's an instructive example, though, because even in that area where he has more control and like, the economy's complic. There's not a good economy button. You know, it's like you can press a button and be like, Louisiana good, California bad. You know, there's things you can do, there are levers you can pull. But even in that way, it's more direct because you can instruct ICE where to go. Right? You can have Kristi Noem instruct them where to go. Like that part. Like there's elements are out of their control, right? I mean, In Florida, Ron DeSantis doesn't want to look like a. You know, and so there have been raids in the Cuban community in Florida that have created some backlash, Right. Like here in Louisiana, there was a story the other day where, like, one of the Trump's biggest donors, companies got raided. And. And so again, at scale, not, not as much, right. But, you know, it's hard to really, you know, it's hard. And these guys aren't exactly firing on all cylinders, right?
- [10:40]
B
And this is why I think the more likely course of action is that he's going to try to take over the Fed. And so what, what Trump is likely to think that he wants to do is just run the economy really, really hot, right? And so French said the same exact.
- [10:56]
A
Thing today, not, not about taking over the Fed, but that's what he does. That's what he would like to do if he could figure it out.
- [11:02]
B
So the Fed meets next week. They are likely to announce, we think it's going to be like a 25 basis point in cut, maybe 50 of the numbers today.
- [11:12]
A
Some of those econ nerds are saying maybe even up to 50, it's possible, could be 50.
- [11:15]
B
But the problem is that, like, inflation is already lurking and people expect. Because the pursuit right now, the Producer Price index is like way out of whack with the consumer Price index, as companies are just trying to eat costs and hold on to market share, but they can't do that indefinitely. And so people think there's a lot of inflation just sort of in the system that hasn't come out yet. If that happens and they wind up doing the rate cuts, then, you know, maybe you solve one problem, but you create another, because what we really have is stagflation. That's what's happening. You know, good on you, Donald Trump, for creating stagflation. That's kind of hard to do. So I think the most likely thing is he you know, he's trying to get rid of Lisa Cook. If he succeeds in that, then he can wait out Jerome Powell whose term ends or maybe force Powell out too. Why not put his own people into the Fed and have the Fed become just another arm of his in the way that the Department of Justice and the FBI now are simply arms of the Trump White House. They don't function with any independence whatsoever. And if you do that, then you can just cut rates. So you can go back to ZIRP and just watch the money machine go right. And that work. You could probably do that for a year or three before you become Argentina.
- [12:34]
A
Right. And it will wouldn't help housing, insurance and there's certainly people with long lead kind of interest rates. I wouldn't help that much, but no.
- [12:41]
B
No, there's any like, you know, would it help farmers? Well, not really, but. But you could help a lot of people in that way because what you're doing is like setting the entire economy on fire. Right. And that, I mean you do that if the central bank in America is no longer independent. I mean that is a like, hey, maybe the dollar is in the world's reserve currency anymore 10 years from now. Like that Again, that's like a, I keep saying like we're already at four alarm fires, but that's like another four alarms throw on the fire.
- [13:11]
A
I mean it's a NATO on fire. Well, I love this, this is why I love talking to you about things like this jbl, because you could have a update for people about how catastrophically bad the narrow one month report is on jobs and have that be accurate and important update for people to get. Not everywhere can you get that update and then add on top of that some catastrophizing about how that terrible one month report might lead to America speed running the Argentina currency collapse. And that's what you come to JVL for.
- [13:40]
B
You know, I'm here to look over the horizon for you, Jim.
- [13:43]
A
All right, that's Jonathan V. Last. Sign up for that newsletter. Subscribe to this feed. Tell your friends we'll see you all soon. Bye.