1 00:00:00,160 --> 00:00:05,519 Speaker 1: So the jobs report comes out and it's me less. 2 00:00:05,200 --> 00:00:07,560 Speaker 2: Than the expectation. But then again, it's midston. 3 00:00:08,280 --> 00:00:10,920 Speaker 1: It has been so long since we've seen a job's 4 00:00:10,960 --> 00:00:14,360 Speaker 1: report that comes out on time, and this one is 5 00:00:14,600 --> 00:00:17,600 Speaker 1: I guess out on time. We're like, my gosh, what 6 00:00:17,600 --> 00:00:20,960 Speaker 1: do we do with this information? Well, the market seems 7 00:00:20,960 --> 00:00:23,400 Speaker 1: to not know what to do with this information. Maybe 8 00:00:23,480 --> 00:00:26,000 Speaker 1: less jobs means we need to cut more rates so 9 00:00:26,040 --> 00:00:29,680 Speaker 1: we can spur this economy. Maybe less jobs means we're 10 00:00:29,680 --> 00:00:32,879 Speaker 1: not manufacturing anything, and that in and of itself is 11 00:00:32,880 --> 00:00:33,440 Speaker 1: a problem. 12 00:00:33,520 --> 00:00:36,040 Speaker 2: Tony Katz, Tony Katz today, good to be with you. 13 00:00:36,120 --> 00:00:39,800 Speaker 1: Doctor Mattwell joins me, economist at the University of Indianapolis. 14 00:00:40,760 --> 00:00:43,040 Speaker 2: Fifty thousand instead of seventy six thousand. 15 00:00:43,280 --> 00:00:47,199 Speaker 1: The November jobs report got revised downward to fifty six thousand. 16 00:00:47,159 --> 00:00:50,320 Speaker 2: And the unemployment rate falls to four point four percent. 17 00:00:50,880 --> 00:00:53,280 Speaker 2: What do I care about? What do I not care about? 18 00:00:55,520 --> 00:00:58,960 Speaker 3: Oh gosh, this is the most fascinating report I know. 19 00:00:59,000 --> 00:01:02,640 Speaker 3: On the headline looks like it's blah, but it's not. Okay, Yeah, 20 00:01:02,680 --> 00:01:05,720 Speaker 3: we only added fifty thousand jobs, but if you dig 21 00:01:05,760 --> 00:01:09,200 Speaker 3: into the details, there's some very interesting parts here. We 22 00:01:09,400 --> 00:01:13,039 Speaker 3: lost eight thousand jobs in manufacturing. We lost twenty one 23 00:01:13,080 --> 00:01:16,680 Speaker 3: thousand jobs in goods production. We lost twenty five thousand 24 00:01:16,720 --> 00:01:20,920 Speaker 3: jobs in retail. That's the bad side. On the good side, 25 00:01:21,000 --> 00:01:25,040 Speaker 3: we added fifty eight thousand private jobs in healthcare government 26 00:01:25,360 --> 00:01:28,960 Speaker 3: that's not good. And leisure and hospitality forty seven thousand. 27 00:01:29,440 --> 00:01:33,039 Speaker 3: But the most important part of this is why why 28 00:01:33,200 --> 00:01:35,920 Speaker 3: was this such a low number? Why was fifty thousand, 29 00:01:35,920 --> 00:01:39,319 Speaker 3: Why was fifty six thousand revised down? It's actually for 30 00:01:39,360 --> 00:01:44,040 Speaker 3: two good reasons. I know this sounds weird. Productivity and 31 00:01:44,520 --> 00:01:48,360 Speaker 3: a broad based recovery. These two things are happening tony. 32 00:01:49,000 --> 00:01:54,080 Speaker 3: We saw yesterday the productivity report came out. Productivity increased 33 00:01:54,120 --> 00:01:57,320 Speaker 3: four point nine percent. That is the amount that you 34 00:01:57,400 --> 00:01:59,920 Speaker 3: and I produced per hour of labor, how much we 35 00:02:00,440 --> 00:02:04,760 Speaker 3: can produce as workers. That is three hundred percent higher 36 00:02:04,800 --> 00:02:07,760 Speaker 3: than last year. We are blowing it out of the 37 00:02:07,800 --> 00:02:11,239 Speaker 3: water in this economy as far as productivity driven by 38 00:02:11,919 --> 00:02:15,320 Speaker 3: you know the answer to this, AI, And that's why 39 00:02:15,320 --> 00:02:18,120 Speaker 3: the employment rate is not that good. That's why we 40 00:02:18,240 --> 00:02:20,840 Speaker 3: aren't adding the number of jobs. Because AI is making 41 00:02:20,919 --> 00:02:25,400 Speaker 3: us a much more productive economy. And let me finish 42 00:02:25,480 --> 00:02:29,960 Speaker 3: my whole thing here. The broad based economy recovery is here. 43 00:02:30,800 --> 00:02:33,280 Speaker 3: We saw that and I've talked about this on the 44 00:02:33,320 --> 00:02:36,000 Speaker 3: show before. The S and P went up eighteen percent 45 00:02:36,080 --> 00:02:39,280 Speaker 3: last year. It wasn't driven by the MAC seven for 46 00:02:39,360 --> 00:02:41,680 Speaker 3: the first time. Yes, they were hired, they were twenty 47 00:02:41,720 --> 00:02:44,359 Speaker 3: eight percent, but the S and P four ninety three 48 00:02:44,480 --> 00:02:47,040 Speaker 3: was still up eleven percent last year. We have a 49 00:02:47,080 --> 00:02:50,799 Speaker 3: broad based recovery. That is a good thing. AI is 50 00:02:50,840 --> 00:02:54,000 Speaker 3: making us more productive. So there's a lot of good things. 51 00:02:54,120 --> 00:02:56,000 Speaker 3: There is some bad parts, but there's a lot of 52 00:02:56,040 --> 00:02:56,880 Speaker 3: good in this report. 53 00:02:58,160 --> 00:03:01,880 Speaker 1: Talking to doctor Matt Well, economist the University of Indianapolis, 54 00:03:02,280 --> 00:03:05,480 Speaker 1: recovery is everything because not only is recovery good for 55 00:03:05,560 --> 00:03:09,200 Speaker 1: the economy large, but that's a conversation about the midterms. 56 00:03:09,200 --> 00:03:12,880 Speaker 1: That's a conversation about how this information is utilized by 57 00:03:13,000 --> 00:03:16,359 Speaker 1: parties when they're trying to sell America on whether or 58 00:03:16,400 --> 00:03:19,639 Speaker 1: not they should get votes. A recovery is a good thing. 59 00:03:19,919 --> 00:03:21,240 Speaker 1: Explain it to me. 60 00:03:22,680 --> 00:03:26,200 Speaker 3: Okay, let me explain the recovery is not a good thing. 61 00:03:27,160 --> 00:03:32,760 Speaker 1: I know, using confusing, man. You just said this is 62 00:03:32,800 --> 00:03:33,880 Speaker 1: the good part of the report. 63 00:03:35,520 --> 00:03:38,600 Speaker 3: The report's good because of the productivity, because they brought 64 00:03:38,640 --> 00:03:42,720 Speaker 3: based recovery. But you said the midterms, And let me 65 00:03:42,760 --> 00:03:45,000 Speaker 3: tell you why it's a bad report for the midterms, 66 00:03:45,400 --> 00:03:48,880 Speaker 3: because the one area that's super weak in this is 67 00:03:48,960 --> 00:03:53,240 Speaker 3: manufacturing goods production. These are the two areas that are 68 00:03:53,280 --> 00:03:58,160 Speaker 3: massively down in the report. And they're down. Why. Okay, 69 00:03:58,360 --> 00:04:00,640 Speaker 3: I'm a professor. I have to give a test, Tony. 70 00:04:01,320 --> 00:04:04,040 Speaker 3: They're down because of one word. And what's the reason. 71 00:04:04,720 --> 00:04:05,680 Speaker 2: Well, I thought that was AI. 72 00:04:07,000 --> 00:04:14,560 Speaker 3: Everything manufacturing is down because of tariffs. Manufacturing and goods 73 00:04:14,560 --> 00:04:17,719 Speaker 3: production are down because of tariffs. The terriffts are shrinking 74 00:04:17,720 --> 00:04:23,520 Speaker 3: the economy relative to manufacturing. Broad based recovery. Fantastic. Trump. 75 00:04:23,800 --> 00:04:26,560 Speaker 3: I've talked about this many times. Trump's his own worst enemy. 76 00:04:26,720 --> 00:04:29,200 Speaker 3: He's doing everything right when it comes to the economy 77 00:04:29,320 --> 00:04:33,919 Speaker 3: except for tariffs. Terrorifts are dragging this economy down. He's 78 00:04:34,160 --> 00:04:37,400 Speaker 3: GDP is up, the employment report looks good. Productivity is 79 00:04:37,440 --> 00:04:40,279 Speaker 3: doing great. The broad based recovery is here. But the 80 00:04:40,320 --> 00:04:42,680 Speaker 3: tariffs are hurting manufacturing, and that's going to hurt it 81 00:04:42,680 --> 00:04:45,160 Speaker 3: because those are jobs. Those are people in factories that 82 00:04:45,200 --> 00:04:48,280 Speaker 3: are losing their jobs. They're not working and they vote 83 00:04:48,520 --> 00:04:50,680 Speaker 3: and that's what's going to hurt him. So as all 84 00:04:50,760 --> 00:04:52,680 Speaker 3: the good things in this report are going to be 85 00:04:52,720 --> 00:04:57,000 Speaker 3: counteracted by the fact that the bad part of it 86 00:04:57,040 --> 00:04:59,320 Speaker 3: is the tariffs are hurting manufacturing. 87 00:05:00,000 --> 00:05:03,080 Speaker 1: But that isn't necessarily how it's going to play in 88 00:05:03,520 --> 00:05:06,719 Speaker 1: a midterm. You could argue that the tariffs overall are 89 00:05:06,760 --> 00:05:08,920 Speaker 1: a giant pain in the butt, which I agree with, 90 00:05:09,200 --> 00:05:11,360 Speaker 1: that it makes Americans pay more for things, and I 91 00:05:11,400 --> 00:05:14,440 Speaker 1: agree with that too. But if there is a conversation 92 00:05:14,520 --> 00:05:16,800 Speaker 1: that the White House can have about broad based recovery, 93 00:05:17,120 --> 00:05:17,640 Speaker 1: that's a win. 94 00:05:17,760 --> 00:05:20,760 Speaker 2: That's a plus. When you say recovery, give. 95 00:05:20,600 --> 00:05:22,599 Speaker 1: Me the places that I should be looking, others should 96 00:05:22,640 --> 00:05:26,200 Speaker 1: be looking that we actually see the tangible results, we 97 00:05:26,360 --> 00:05:27,799 Speaker 1: see the recovery in action. 98 00:05:29,480 --> 00:05:33,240 Speaker 3: Well, okay, when I say the recovery profits, So profits 99 00:05:33,240 --> 00:05:35,760 Speaker 3: are up across the board for companies. That's why the 100 00:05:35,800 --> 00:05:38,560 Speaker 3: market is up. The profits are up because costs are down. 101 00:05:38,600 --> 00:05:41,560 Speaker 3: Why are costs down because AI companies are the more 102 00:05:41,560 --> 00:05:45,000 Speaker 3: efficient people to do more with fewer people. That's why 103 00:05:45,040 --> 00:05:48,120 Speaker 3: I go back to the harming it politically. Now I 104 00:05:48,160 --> 00:05:50,560 Speaker 3: am not the political guy. I will defer to you 105 00:05:50,600 --> 00:05:54,599 Speaker 3: on that. But from my standpoint, all this good news, 106 00:05:54,640 --> 00:05:59,920 Speaker 3: which is more productivity, more profits, expanding private e con 107 00:06:00,120 --> 00:06:02,680 Speaker 3: to me, it's coming at a cost. And what's the 108 00:06:02,720 --> 00:06:07,760 Speaker 3: cost people? The AI and the increase in productivity is 109 00:06:07,839 --> 00:06:10,800 Speaker 3: reducing the amount of labor that we need. The tariffs 110 00:06:10,839 --> 00:06:12,920 Speaker 3: are reducing the amount of labor that we need. So 111 00:06:13,520 --> 00:06:17,400 Speaker 3: this report, the headline is not a good headline, but 112 00:06:17,560 --> 00:06:19,960 Speaker 3: underneath it, I see good things for the economies. Kind 113 00:06:19,960 --> 00:06:22,560 Speaker 3: of like when the Internet came out, and when computers 114 00:06:22,560 --> 00:06:26,080 Speaker 3: came out, we were oh no, no more typewriters, oh no, 115 00:06:26,360 --> 00:06:29,719 Speaker 3: less manual labor. Well, that was good in the long term. 116 00:06:30,000 --> 00:06:31,839 Speaker 3: AI is going to be good in the long term, 117 00:06:31,839 --> 00:06:35,360 Speaker 3: but it's going to cause a short term pain to people, 118 00:06:35,600 --> 00:06:36,599 Speaker 3: and people vote. 119 00:06:37,600 --> 00:06:41,600 Speaker 1: Talking to doctor Matt Will economists at the University of Indianapolis, 120 00:06:42,120 --> 00:06:44,440 Speaker 1: I've argued that as long as that gets explained, you 121 00:06:44,440 --> 00:06:46,359 Speaker 1: can get people on your side. People want to be 122 00:06:46,480 --> 00:06:49,040 Speaker 1: in the fight. They don't want to have just things 123 00:06:49,160 --> 00:06:51,400 Speaker 1: happen to them. They want to be part of something 124 00:06:51,520 --> 00:06:53,880 Speaker 1: that's going to create the better opportunity for them, for 125 00:06:53,960 --> 00:06:57,760 Speaker 1: their kids, et cetera. The other part of this was 126 00:06:57,839 --> 00:07:02,200 Speaker 1: how the market responded and reacted and whether or not 127 00:07:02,279 --> 00:07:04,200 Speaker 1: the markets would go up or down in this field 128 00:07:04,279 --> 00:07:07,679 Speaker 1: that you know, if you've got less jobs than you thought. 129 00:07:08,040 --> 00:07:11,920 Speaker 1: This could be a way to pressure Jerome Powell into 130 00:07:11,960 --> 00:07:15,040 Speaker 1: more rate cuts. Now, the pressure has been on Jerome 131 00:07:15,080 --> 00:07:17,680 Speaker 1: Powell for a year and a half to get more 132 00:07:17,760 --> 00:07:21,520 Speaker 1: rate cuts, they haven't necessarily come. Does this signal to 133 00:07:21,560 --> 00:07:24,040 Speaker 1: the Federal Reserve this is a good time to cut 134 00:07:24,080 --> 00:07:25,280 Speaker 1: a quarter point or more. 135 00:07:26,360 --> 00:07:30,360 Speaker 3: No, absolutely not, because we have a very robust GDP 136 00:07:30,440 --> 00:07:32,800 Speaker 3: at the moment. You've talked about it on the show, 137 00:07:33,040 --> 00:07:36,520 Speaker 3: I've mentioned it. This GDP is good, so we don't 138 00:07:36,520 --> 00:07:39,640 Speaker 3: have a problem there, and we're technically still at full employment. 139 00:07:39,840 --> 00:07:42,120 Speaker 3: Even though the jobs number is getting worse, it's not 140 00:07:42,200 --> 00:07:45,240 Speaker 3: as good as it should be. It's still technically within 141 00:07:45,280 --> 00:07:47,880 Speaker 3: a range of what we call full employment. So the 142 00:07:47,920 --> 00:07:51,480 Speaker 3: two mandates, which is price stability and employment. Again i'm 143 00:07:51,520 --> 00:07:55,080 Speaker 3: not a fan of the employment part is not a problem. 144 00:07:55,160 --> 00:07:59,080 Speaker 3: So there's no reason to cut rates for employment purposes. 145 00:07:59,280 --> 00:08:03,400 Speaker 3: But there is reason to keep rates higher because of inflation. 146 00:08:03,920 --> 00:08:06,760 Speaker 3: And we've seen inflation. That's still there. It's in the 147 00:08:07,000 --> 00:08:11,000 Speaker 3: PMI report and the CPI report and the PPI report. 148 00:08:11,080 --> 00:08:14,119 Speaker 3: We still have inflation. It's not at two percent yet 149 00:08:14,480 --> 00:08:16,240 Speaker 3: we should be never mind. 150 00:08:16,160 --> 00:08:19,040 Speaker 1: Never mind the reports for a second, gold at forty 151 00:08:19,080 --> 00:08:21,960 Speaker 1: four and eighty four dollars an ounce, silver at seventy 152 00:08:22,040 --> 00:08:24,040 Speaker 1: nine dollars and twenty two cents an ounce. Of course 153 00:08:24,080 --> 00:08:27,000 Speaker 1: that can change is when people hear this weather, it's 154 00:08:27,080 --> 00:08:30,080 Speaker 1: podcast or anything else. The point is we've got silver 155 00:08:30,160 --> 00:08:33,160 Speaker 1: that has cossed eighty dollars an ounce. That isn't happening 156 00:08:33,200 --> 00:08:36,440 Speaker 1: because people think, oh, silver is the future. It's the 157 00:08:36,480 --> 00:08:40,240 Speaker 1: hedge conversation. So this tells me that the market still 158 00:08:40,280 --> 00:08:42,120 Speaker 1: does believe that inflation is there. 159 00:08:43,640 --> 00:08:48,160 Speaker 3: You're correct. You you added data to exactly my point, 160 00:08:48,200 --> 00:08:52,000 Speaker 3: which is inflation isn't dead. Silver and gold are perfect 161 00:08:52,040 --> 00:08:55,120 Speaker 3: indicators of that. In addition to the data the nerdy 162 00:08:55,200 --> 00:08:57,280 Speaker 3: data points I just gave to you, you gave a 163 00:08:57,320 --> 00:09:00,160 Speaker 3: real hands on example of what people see every day 164 00:09:00,160 --> 00:09:03,280 Speaker 3: that inflation is here and the said needs to fight inflation. 165 00:09:03,840 --> 00:09:05,880 Speaker 3: Now will they fight it? We'll see what the next 166 00:09:05,880 --> 00:09:08,800 Speaker 3: said chairman does. But if it's Kevin Walsh, I'm optimistic 167 00:09:08,840 --> 00:09:10,080 Speaker 3: he's going to do the right job. 168 00:09:10,720 --> 00:09:11,200 Speaker 2: Really quick. 169 00:09:11,240 --> 00:09:13,280 Speaker 1: Before I let you go talking to doctor Matt Weell, 170 00:09:13,320 --> 00:09:16,880 Speaker 1: economist at the University of Indianapolis, and maybe you're not 171 00:09:17,480 --> 00:09:20,800 Speaker 1: totally up on this. The President has said he wants 172 00:09:20,840 --> 00:09:27,040 Speaker 1: to help people with housing, and the idea is to 173 00:09:27,080 --> 00:09:32,440 Speaker 1: buy mortgage loans, like two hundred billion dollars in the 174 00:09:32,679 --> 00:09:39,280 Speaker 1: purchasing of mortgage loans, and that's going to now create 175 00:09:39,360 --> 00:09:45,000 Speaker 1: a great opportunity to home buying. I have not been 176 00:09:45,040 --> 00:09:49,280 Speaker 1: able to make any sense of this whatsoever. And this 177 00:09:49,559 --> 00:09:53,760 Speaker 1: just took place yesterday. I don't think everybody has seen 178 00:09:53,800 --> 00:09:58,320 Speaker 1: it yet. The question is, is there something the government 179 00:09:58,360 --> 00:10:02,040 Speaker 1: can be doing about buying mortgages that is going to 180 00:10:02,080 --> 00:10:04,200 Speaker 1: bring down the cost of buying a home? 181 00:10:05,320 --> 00:10:09,160 Speaker 3: No, no, no, oh, Tony. This is where I said, 182 00:10:09,600 --> 00:10:13,079 Speaker 3: Trump is in the boxing ring with himself. He's winning, 183 00:10:13,160 --> 00:10:15,240 Speaker 3: he's losing. He's winning, he's losing. And this is the 184 00:10:15,360 --> 00:10:18,040 Speaker 3: losing part of it. He announced, for people that aren't 185 00:10:18,040 --> 00:10:20,960 Speaker 3: aware of it, two hundred billion dollars that the government 186 00:10:21,040 --> 00:10:23,640 Speaker 3: is going to purchase of mortgages. That's what they did 187 00:10:23,679 --> 00:10:26,360 Speaker 3: during the quantitative easing. That's what they did in the 188 00:10:26,480 --> 00:10:29,559 Speaker 3: too Big to Fail crisis. The government stepped in and 189 00:10:29,640 --> 00:10:34,480 Speaker 3: bought mortgages to produce the economy. That's the opposite that 190 00:10:34,559 --> 00:10:38,040 Speaker 3: will cause inflation. We need the government to be selling 191 00:10:38,080 --> 00:10:40,199 Speaker 3: all the mortgages that they own the government is the 192 00:10:40,280 --> 00:10:42,520 Speaker 3: largest owner of mortgages at the moment. It started in 193 00:10:42,520 --> 00:10:46,839 Speaker 3: two thousand and nine. That's wrong. He's got the wrong 194 00:10:46,920 --> 00:10:49,000 Speaker 3: attitude on this. He's got to not get in the 195 00:10:49,040 --> 00:10:53,000 Speaker 3: home buying business. He can't get into the denying companies 196 00:10:53,000 --> 00:10:55,880 Speaker 3: to invest in homes business, which he mentioned. He wants 197 00:10:55,920 --> 00:11:00,160 Speaker 3: to regulate the salary of executives, the payments that they 198 00:11:00,200 --> 00:11:05,719 Speaker 3: make to their employees and to their shareholders. This, you know, 199 00:11:05,800 --> 00:11:07,840 Speaker 3: I don't know what happens. Trump wakes up on one 200 00:11:07,880 --> 00:11:09,760 Speaker 3: side of the bed and he's awesome. He wakes up 201 00:11:09,760 --> 00:11:12,000 Speaker 3: on the other side of the bed and he's a disaster. 202 00:11:12,679 --> 00:11:13,720 Speaker 3: I can't figure it out. 203 00:11:15,040 --> 00:11:19,479 Speaker 1: That is doctor Mattwill, economists at the University of Indianapolis. 204 00:11:19,559 --> 00:11:20,880 Speaker 2: Dr Matt Will on. 205 00:11:20,880 --> 00:11:22,760 Speaker 1: The Twitter x if you want to follow him there. 206 00:11:23,040 --> 00:11:25,280 Speaker 1: I appreciate you, sir as always more coming up. I'm 207 00:11:25,320 --> 00:11:28,280 Speaker 1: Tony Katz and this is Tony Katz Today. Find everything 208 00:11:28,280 --> 00:11:29,440 Speaker 1: at tonykats dot com.