1 00:00:00,200 --> 00:00:04,120 Speaker 1: The latest jobs report just dropped. Let me start by 2 00:00:04,120 --> 00:00:07,080 Speaker 1: telling you why it's important. This is the most timely 3 00:00:07,120 --> 00:00:10,160 Speaker 1: and most accurate indicator of the state of the economy, 4 00:00:10,160 --> 00:00:13,000 Speaker 1: and we've just learned where we were in Gune. Of course, 5 00:00:13,080 --> 00:00:15,720 Speaker 1: like any data, it's not going to be perfect. Look, 6 00:00:15,800 --> 00:00:19,919 Speaker 1: here's today's big story. It's basically that the economy is 7 00:00:19,960 --> 00:00:24,000 Speaker 1: not sinking and it's not surging. We're treading water. Let 8 00:00:24,079 --> 00:00:25,720 Speaker 1: me give you some numbers to help you make sense 9 00:00:25,720 --> 00:00:28,480 Speaker 1: of all of that. So this job's report tells us 10 00:00:28,480 --> 00:00:31,720 Speaker 1: that employment grew by fifty seven thousand over the month. 11 00:00:32,520 --> 00:00:34,360 Speaker 1: If I told you a number like that a few 12 00:00:34,440 --> 00:00:37,040 Speaker 1: years ago, you would have said fifty seven thousand, that's 13 00:00:37,040 --> 00:00:40,159 Speaker 1: not very much. Most months, the economy grows much more 14 00:00:40,200 --> 00:00:43,080 Speaker 1: one hundred and fifty, two hundred thousand, and three hundred 15 00:00:43,080 --> 00:00:47,440 Speaker 1: thousand numbers like that, Yes, and this is a different economy. 16 00:00:47,720 --> 00:00:51,760 Speaker 1: Let me explain why. The most important thing that determines 17 00:00:51,800 --> 00:00:53,640 Speaker 1: the pace of jobs growth is actually the rate of 18 00:00:53,640 --> 00:00:57,440 Speaker 1: population growth. More people both means more buyers and more workers. 19 00:00:57,560 --> 00:01:00,720 Speaker 1: We're seen a sharp contraction in population growth under the 20 00:01:00,760 --> 00:01:05,520 Speaker 1: Trump administration, mostly due to immigration crackdowns. Also, people aren't 21 00:01:05,560 --> 00:01:07,760 Speaker 1: coming in even if they wanted to in a bunch 22 00:01:07,800 --> 00:01:11,039 Speaker 1: of cases. So what that means is, as this concept 23 00:01:11,080 --> 00:01:14,959 Speaker 1: called break even jobs growth, it's basically, how many jobs 24 00:01:15,000 --> 00:01:17,400 Speaker 1: do we need to create per month in order to 25 00:01:17,440 --> 00:01:21,640 Speaker 1: just keep everything nice and steady. And a few years 26 00:01:21,640 --> 00:01:23,440 Speaker 1: ago you might have set one hundred and fifty thousand 27 00:01:23,520 --> 00:01:26,480 Speaker 1: or even two hundred thousand. Now the truth is, we 28 00:01:26,560 --> 00:01:30,200 Speaker 1: don't know what it is, but we do know what's 29 00:01:30,240 --> 00:01:32,640 Speaker 1: going to be a lot lower, and a reasonable estimate 30 00:01:32,760 --> 00:01:36,000 Speaker 1: might be round about sixty thousand jobs. And so this 31 00:01:36,040 --> 00:01:38,760 Speaker 1: month we got about sixty thousand jobs and the unemployment 32 00:01:38,840 --> 00:01:44,280 Speaker 1: rate remained roughly constant. So maybe we really are just 33 00:01:44,480 --> 00:01:47,400 Speaker 1: treading water. We're hitting break even jobs growth. So that's 34 00:01:47,440 --> 00:01:50,760 Speaker 1: the first thing. Sixty thousand jobs are created. That's well 35 00:01:50,800 --> 00:01:54,400 Speaker 1: below expectations. Markets are expecting around about one hundred and 36 00:01:54,400 --> 00:01:57,440 Speaker 1: twenty thousand jobs to be created, So don't think of 37 00:01:57,440 --> 00:01:58,880 Speaker 1: this as double. Just think of it as they were 38 00:01:58,920 --> 00:02:02,280 Speaker 1: expecting a few more. So they were disappointed by this. 39 00:02:03,240 --> 00:02:06,160 Speaker 1: Second thing to understand is this comes on after a 40 00:02:06,200 --> 00:02:10,160 Speaker 1: month ago. The last job's report was unbelievably strong. It 41 00:02:10,200 --> 00:02:12,200 Speaker 1: wasn't just that we got very strong jobs growth, we 42 00:02:12,280 --> 00:02:14,960 Speaker 1: got positive revisions for the two previous months, and it 43 00:02:15,000 --> 00:02:18,840 Speaker 1: looked like someone put the pedal to the metal. Well, 44 00:02:18,960 --> 00:02:21,680 Speaker 1: we've subsequently learned that a lot of that job's growth, 45 00:02:21,720 --> 00:02:23,919 Speaker 1: or some of that job's growth was illsory. So the 46 00:02:24,040 --> 00:02:27,160 Speaker 1: main job's number was revised down by forty three thousand 47 00:02:27,160 --> 00:02:29,440 Speaker 1: and two big growth of one hundred and twenty nine, 48 00:02:30,000 --> 00:02:33,840 Speaker 1: and April was revised down by thirty one thousand and 49 00:02:33,919 --> 00:02:35,919 Speaker 1: so basically you put it all together, and this is 50 00:02:35,960 --> 00:02:38,400 Speaker 1: an economy that over the past three months has been 51 00:02:38,440 --> 00:02:43,240 Speaker 1: creating round about one hundred thousand jobs a month, maybe 52 00:02:43,280 --> 00:02:45,239 Speaker 1: a little less, maybe a bit more. I'm trying to 53 00:02:45,240 --> 00:02:46,960 Speaker 1: do math in my head right there. I'm not very 54 00:02:47,000 --> 00:02:52,519 Speaker 1: good at it. So maybe that's enough actually to meet 55 00:02:52,560 --> 00:02:55,639 Speaker 1: that break even job growth. And so that might explain 56 00:02:55,720 --> 00:02:59,880 Speaker 1: why the unemployment rate it had been slowly drifting our 57 00:03:00,040 --> 00:03:02,000 Speaker 1: and then it may be at flatlined, but it might 58 00:03:02,040 --> 00:03:04,920 Speaker 1: be slowly drifting down right now with this recent surge 59 00:03:04,960 --> 00:03:08,200 Speaker 1: in jobs growth. So well, we have as positive jobs growth, 60 00:03:08,280 --> 00:03:10,800 Speaker 1: not as much as we thought we had for previous months, 61 00:03:10,800 --> 00:03:12,680 Speaker 1: and not as much as we hoped we would have 62 00:03:12,760 --> 00:03:16,720 Speaker 1: this month, so disappointing relative to expectations, but in a 63 00:03:16,760 --> 00:03:19,639 Speaker 1: pretty good spot. So now the unemployment rate is four 64 00:03:19,680 --> 00:03:22,160 Speaker 1: point two percent. That's just down a tick from four 65 00:03:22,200 --> 00:03:26,079 Speaker 1: point three percent. But overall the unemployment numbers have been 66 00:03:26,160 --> 00:03:30,160 Speaker 1: looking reasonably good. And by the way, if I keep 67 00:03:30,200 --> 00:03:32,080 Speaker 1: looking away, that's just me trying to check out all 68 00:03:32,080 --> 00:03:34,920 Speaker 1: my graphs and facts and figures as we're talking right here. 69 00:03:37,000 --> 00:03:39,960 Speaker 1: Another big question with all of this is, you know, 70 00:03:40,120 --> 00:03:42,520 Speaker 1: how should you think about it? Today is the day 71 00:03:42,800 --> 00:03:45,400 Speaker 1: in every month where you should really update your thinking 72 00:03:45,440 --> 00:03:49,280 Speaker 1: about the economy. So, as I said, not thinking, not surging, 73 00:03:49,840 --> 00:03:52,200 Speaker 1: treading water. The other thing that I think people often 74 00:03:52,200 --> 00:03:53,680 Speaker 1: think about at a time like this is what does 75 00:03:53,760 --> 00:03:56,280 Speaker 1: this mean for the Fed? Okay, so a month ago 76 00:03:56,360 --> 00:03:58,360 Speaker 1: we saw two things going on at the same time. 77 00:03:58,400 --> 00:04:02,160 Speaker 1: We saw inflation predominantly because of the Iran War but 78 00:04:02,200 --> 00:04:05,400 Speaker 1: also because of tariff's and you saw the job market surging. 79 00:04:05,760 --> 00:04:08,160 Speaker 1: Look when the job market surging, you're worried about more 80 00:04:08,280 --> 00:04:11,119 Speaker 1: overheating and more inflation. So what you had was two 81 00:04:11,200 --> 00:04:14,480 Speaker 1: reasons that would have been pushing the Fed to raise 82 00:04:14,600 --> 00:04:19,200 Speaker 1: rates and zero reasons. I'm sorry President Trump for cutting 83 00:04:19,240 --> 00:04:22,200 Speaker 1: rates anytime soon. What you've seen is the job This 84 00:04:22,320 --> 00:04:25,400 Speaker 1: Job's report suggests a more sustainable rate of jobs growth, 85 00:04:25,880 --> 00:04:29,880 Speaker 1: less likely to cause overheating. So but we still have 86 00:04:29,960 --> 00:04:32,919 Speaker 1: inflation which is pushing towards a rate rise. So I 87 00:04:32,920 --> 00:04:35,480 Speaker 1: think the case for a rate rise has gone from 88 00:04:35,880 --> 00:04:41,440 Speaker 1: unmistakably obvious to moderately weaker but still reasonably strong. And 89 00:04:41,480 --> 00:04:43,600 Speaker 1: you should continue to expect that the Fed is going 90 00:04:43,640 --> 00:04:45,599 Speaker 1: to be looking at rate rises at a time when 91 00:04:45,680 --> 00:04:50,000 Speaker 1: unemployment is either flat or falling and inflation is high 92 00:04:50,040 --> 00:04:54,000 Speaker 1: and possibly even rising. Hey, look, it's too easy for 93 00:04:54,040 --> 00:04:57,040 Speaker 1: people to focus on what this month's number is. Every 94 00:04:57,080 --> 00:05:00,800 Speaker 1: month's number is noisy, every month gets revol And yes, 95 00:05:00,880 --> 00:05:04,400 Speaker 1: by the way, we still believe these jobs numbers are true. 96 00:05:05,560 --> 00:05:09,000 Speaker 1: I've talked more about that in past videos. But we 97 00:05:10,200 --> 00:05:12,560 Speaker 1: really want to use this to take track of how 98 00:05:12,600 --> 00:05:17,120 Speaker 1: the recovery or this economic expansion as a whole is working. 99 00:05:17,160 --> 00:05:19,360 Speaker 1: And so there's a few longer run stories that we've 100 00:05:19,360 --> 00:05:22,360 Speaker 1: really been focusing on platypus economics that I want to 101 00:05:22,440 --> 00:05:25,720 Speaker 1: keep focusing on here. The first is possibly the most 102 00:05:25,720 --> 00:05:28,680 Speaker 1: surprising or possibly most interesting thing going on, which is 103 00:05:28,720 --> 00:05:33,760 Speaker 1: since January twenty twenty five, ninety percent of all jobs 104 00:05:33,800 --> 00:05:37,080 Speaker 1: created under the second Trump administration have gone to women 105 00:05:37,279 --> 00:05:40,640 Speaker 1: of all non farm payrolls jobs. That's a stunning fact. 106 00:05:40,720 --> 00:05:43,920 Speaker 1: It's an interesting imbalance. And in fact, women now hold 107 00:05:43,920 --> 00:05:47,119 Speaker 1: a majority of all non farm payrolls jobs, as they've 108 00:05:47,120 --> 00:05:50,520 Speaker 1: done for a few months. It's an interesting fact on 109 00:05:50,520 --> 00:05:53,320 Speaker 1: its own. It's a doubly interesting fact when you juxtapose 110 00:05:53,400 --> 00:05:57,080 Speaker 1: it with the story of the economy that one hears 111 00:05:57,120 --> 00:06:00,039 Speaker 1: from the administration. It's a story of hard hats and 112 00:06:00,120 --> 00:06:04,560 Speaker 1: blokes and steel steel, toad birds and big buffy fellas 113 00:06:04,640 --> 00:06:08,359 Speaker 1: getting back to manufacturing. But that's not what's been happening 114 00:06:08,400 --> 00:06:11,800 Speaker 1: at all. This is an economy that has grown largely 115 00:06:11,839 --> 00:06:15,359 Speaker 1: through the service sector in predominantly female fields. That's a 116 00:06:15,400 --> 00:06:19,320 Speaker 1: lot of what's going on here, But you know, interesting 117 00:06:19,360 --> 00:06:23,880 Speaker 1: to keep your eye on. This is an increasingly feminized workforce. Now, 118 00:06:25,080 --> 00:06:28,080 Speaker 1: the next important part of this analysis actually helps explain 119 00:06:28,120 --> 00:06:32,160 Speaker 1: what's going on. This is also an unbalanced economic expansion. 120 00:06:32,520 --> 00:06:35,520 Speaker 1: In fact, all of the economic expansions since January twenty 121 00:06:35,560 --> 00:06:38,479 Speaker 1: twenty five, more than one hundred percent of it, is 122 00:06:38,560 --> 00:06:41,200 Speaker 1: due to the growth of health care and social assistance. 123 00:06:42,040 --> 00:06:44,400 Speaker 1: Once you look at healthcare and social assistance, if you 124 00:06:44,440 --> 00:06:46,159 Speaker 1: took that out of the picture, the rest of the 125 00:06:46,160 --> 00:06:50,760 Speaker 1: economy has actually shed jobs overall. That's really quite striking. 126 00:06:52,200 --> 00:06:55,120 Speaker 1: That's not to say if healthcare hadn't happened, the rest 127 00:06:55,160 --> 00:06:57,239 Speaker 1: of the economy would have shrunk. A lot of workers 128 00:06:57,240 --> 00:06:59,480 Speaker 1: would have moved across found other ways to find jobs. 129 00:07:00,120 --> 00:07:03,920 Speaker 1: But it is a strikingly unbalanced economy. You know. I've 130 00:07:03,920 --> 00:07:06,400 Speaker 1: looked a little harder at this and some other data, 131 00:07:06,480 --> 00:07:09,600 Speaker 1: and it's not unusual to see this sort of imbalance 132 00:07:09,720 --> 00:07:12,840 Speaker 1: in an economic expansion. So I think what's more striking 133 00:07:12,920 --> 00:07:16,520 Speaker 1: here is the juxtaposition of the reality of our economy, 134 00:07:16,600 --> 00:07:20,080 Speaker 1: which is it's the care economy that is really growing, 135 00:07:20,200 --> 00:07:23,480 Speaker 1: and over the past month, that care economy is just 136 00:07:23,560 --> 00:07:25,880 Speaker 1: it's been absolutely relentless. It grew this month, that grew 137 00:07:25,920 --> 00:07:28,680 Speaker 1: the month before, It's been growing month after month. The 138 00:07:28,720 --> 00:07:31,520 Speaker 1: rest of the economy basically flatlined. Grew a little bit 139 00:07:31,520 --> 00:07:33,800 Speaker 1: this last month, but it's still far behind where it 140 00:07:33,920 --> 00:07:36,320 Speaker 1: was a year and a half ago. And so by 141 00:07:36,360 --> 00:07:39,640 Speaker 1: the way that this grow enormous growth in healthcare and 142 00:07:39,680 --> 00:07:41,680 Speaker 1: social assistance while the rest of the economy has actually 143 00:07:41,720 --> 00:07:44,400 Speaker 1: created less jobs, gives you a sense of why for 144 00:07:44,520 --> 00:07:47,520 Speaker 1: many people it feels like economic opportunity might be shrinking 145 00:07:47,680 --> 00:07:50,960 Speaker 1: if you're not in the healthcare sector. In fact, it is. 146 00:07:51,880 --> 00:07:54,600 Speaker 1: This also explains what's going on with the gender composition 147 00:07:54,680 --> 00:07:59,760 Speaker 1: of this economic expansion these healthcare is a traditionally predominantly 148 00:07:59,800 --> 00:08:03,480 Speaker 1: feed my occupation. They were already employing a lot of women. 149 00:08:03,720 --> 00:08:06,800 Speaker 1: Now are as it expands, they're continuing to employ a 150 00:08:06,840 --> 00:08:09,400 Speaker 1: lot of men. Keep your eye on this space, because 151 00:08:09,400 --> 00:08:11,760 Speaker 1: it suggests that if this continues, and actually I do 152 00:08:11,840 --> 00:08:14,760 Speaker 1: expect it to continue not just for years, but for decades, 153 00:08:15,320 --> 00:08:17,440 Speaker 1: then men are going to have to come to terms 154 00:08:17,440 --> 00:08:19,480 Speaker 1: with the fact that the future of the economy looks 155 00:08:19,560 --> 00:08:22,720 Speaker 1: very different than the past, and what were historically masculine 156 00:08:22,800 --> 00:08:28,040 Speaker 1: jobs are no longer exclusively the domain of men. And 157 00:08:28,200 --> 00:08:31,800 Speaker 1: that really brings me to the one industry the administration's 158 00:08:31,840 --> 00:08:37,200 Speaker 1: focused most squarely on has been manufacturing, and they've delivered 159 00:08:37,360 --> 00:08:41,280 Speaker 1: literally nothing on this manufacturing. The US economy has been 160 00:08:41,320 --> 00:08:44,440 Speaker 1: shedding manufacturing jobs for decades and nothing has happened in 161 00:08:44,440 --> 00:08:47,680 Speaker 1: the last year and a half to reverse that. In fact, 162 00:08:47,960 --> 00:08:51,240 Speaker 1: manufacturing jobs have fallen over the last year and a half, 163 00:08:51,320 --> 00:08:54,480 Speaker 1: despite all of the efforts of the administration to talk 164 00:08:54,520 --> 00:08:59,240 Speaker 1: about factories, to create jobs, to do deals and so on. 165 00:09:00,040 --> 00:09:02,640 Speaker 1: There's a cheeky fact, by the way, which is that 166 00:09:02,760 --> 00:09:05,760 Speaker 1: the first few months of the Trump administration didn't see 167 00:09:05,800 --> 00:09:09,000 Speaker 1: much of a fall in manufacturing employment, and then came 168 00:09:09,040 --> 00:09:12,120 Speaker 1: the so called Liberation Day tariffs. These were designed to 169 00:09:12,160 --> 00:09:15,840 Speaker 1: help manufacturing, but in fact, since then that is when 170 00:09:15,960 --> 00:09:20,240 Speaker 1: the drop off in manufacturing employment really took off, and 171 00:09:20,360 --> 00:09:24,000 Speaker 1: so we lost a lot of manufacturing jobs. Subsequent Liberation Day, 172 00:09:24,960 --> 00:09:27,640 Speaker 1: the trade war has changed a lot since then, something 173 00:09:27,679 --> 00:09:30,280 Speaker 1: I'm going to continue to talk about in other videos. 174 00:09:30,320 --> 00:09:33,120 Speaker 1: But when the Supreme Court struck down those Liberation Day tariffs, 175 00:09:33,200 --> 00:09:34,400 Speaker 1: in fact, that's when we've got a little bit of 176 00:09:34,400 --> 00:09:38,480 Speaker 1: a turnaround in manufacturing. Is that cause an effect or 177 00:09:38,520 --> 00:09:41,319 Speaker 1: is that coincidence or is that something else going on? Honestly, 178 00:09:41,360 --> 00:09:43,280 Speaker 1: I can't tell you, but I do know that the 179 00:09:43,320 --> 00:09:47,200 Speaker 1: promised manufacturing revival is not here. Continuing to talk about 180 00:09:47,240 --> 00:09:49,800 Speaker 1: it isn't helping any of us. It's not getting us anywhere. 181 00:09:50,559 --> 00:09:54,880 Speaker 1: One final fact before we leave, this Job's report also 182 00:09:54,920 --> 00:09:58,199 Speaker 1: tells us about wage growth. The important story for people 183 00:09:58,280 --> 00:10:01,520 Speaker 1: is what's going on with wages, relatives, prices. That determines 184 00:10:01,559 --> 00:10:04,480 Speaker 1: how much your living standards arising. Today, we've got the 185 00:10:04,520 --> 00:10:06,240 Speaker 1: wages part of the equation. We've got a little bit 186 00:10:06,240 --> 00:10:08,880 Speaker 1: of growth in wages. We haven't seen the prices data, 187 00:10:08,920 --> 00:10:10,840 Speaker 1: but we have a pretty good guess that they continue 188 00:10:10,880 --> 00:10:14,160 Speaker 1: to go up. So far over the last eighteen months, 189 00:10:14,240 --> 00:10:17,200 Speaker 1: wages and prices as of last month had risen an 190 00:10:17,240 --> 00:10:20,240 Speaker 1: exactly equal amount. My guess when we get the price 191 00:10:20,360 --> 00:10:22,360 Speaker 1: data is we're going to discover the price has got ahead, 192 00:10:22,400 --> 00:10:25,679 Speaker 1: which means that people's real wages on average have fallen 193 00:10:25,720 --> 00:10:28,480 Speaker 1: over the last eighteen months, and they've been falling fairly 194 00:10:28,520 --> 00:10:31,760 Speaker 1: sharply over the past six months. So if folks around 195 00:10:31,800 --> 00:10:34,760 Speaker 1: you are feeling miserable, I think those data will help 196 00:10:34,800 --> 00:10:39,760 Speaker 1: you understand that. Okay, big picture, we're not surging, we're 197 00:10:39,760 --> 00:10:43,720 Speaker 1: not sinking. We're treading water, and honestly, at times like this, 198 00:10:43,880 --> 00:10:46,040 Speaker 1: sometimes treading water might be all we can hope for.