WARNING: Why Millions Of Americans Could Lose Their Jobs In The Coming Months

The Federal Reserve is going to ensure that unemployment is going to increase. And so that means the U.S. economy is going to start losing more and more jobs. Now, on this quick video, I'm going to tell you why the Federal Reserve is going to be pushing for the unemployment rate to increase and why you are going to see a spike in the unemployment rate in the next several months. The first thing you need to know is that the jobs report for September of 2022 is out. And that jobs report reveals a few very important things that you need to keep in mind. There were 263,000 jobs added in September of this year. Now, that's good, right? That sounds good, feels good, looks good on paper. So now we're still seeing jobs being added, but at a much lower rate. Now, it's projected that in October and November, the amount of jobs that are going to be added is going to decrease by at least 50%. Now, the second thing you need to know is that the unemployment rate right now, as reported by the Department of Labor, is 3.5%, which is a decrease from last month. I think we were at 3.7 or 3.8%, but now it's down to 3.5%. And that looks like, oh, it's going the opposite direction, right? Unemployment is going down. Sounds good, looks good, feels good, right? But here's the problem with that. We know that the Federal Reserve is continuing to increase rates and raise the interest rate. Now, why does the interest rates have anything at all to do with unemployment? Well, let's talk about that because the Federal Reserve has said recently that they are not going to lower rates. Matter of fact, they said they're going to continue to increase rates until inflation is down around 2%. The Federal Reserve has raised rates five times this year already. In fact, they've raised rates by 75 basis points for three straight times in a row. Now, 75 basis points just means 0.75%. 100 basis points is 1%. So, that tells us that the Federal Reserve is very, very serious about increasing these rates and slowing down spending. Now, the Federal Reserve meets two more times this year, and most experts are expecting them to raise rates both times, maybe 75 basis points in November, and again, potentially 50 or 75 basis points in December. Now, that remains to be seen, but that's probably going to happen based on inflation continuing to be high. So, here's how that works. When the Federal Reserve decides to raise rates, it has a trickle-down effect on the labor market and jobs in America. And here's the connection. When the Federal Reserve raises interest rates, money becomes more expensive to borrow. And so, what that does is it deters or discourages people from borrowing money. So, if someone borrowed money nine months ago to buy a house, they'd be paying a little over 3% interest. Today, they'd be paying a little over 6% interest. So, the interest rates have doubled since January. And so, that means the cost of money, the cost that it takes to borrow the money is now much more expensive. And that means it's going to cost more to go borrow money to get a loan for a home, to borrow money to get a loan for a car, to borrow money on your credit card purchases. Everything goes up and it costs more money. And that discourages spending. And so, what that does is when it discourages spending, it means demand for things like homes and cars, they go down. And when the demand for things go down, it also lowers the prices. But there's one other caveat. There's one other thing that lower demand and higher interest rates does. And that is that it causes companies to say, wait a minute, I can no longer afford to pay 100 employees. I have to let a few employees go. In other words, let's put it like this, guys. If this hat on my head, if I'm charging $150 for this hat and demand is high for the hat, there's a lot of demand out there for this hat, everybody wants to buy it for $150. I'm probably going to raise the amount of the hat to about $151 or $152 or $155. I'm going to raise it because there's demand. And if there continues to be demand, the price of the hat that I'm going to sell it at is going to continue to go up. Now, when the people can no longer buy this hat for $150, the demand drops. Then as a company that makes these hats, I have to now say I got two choices. My biggest expense as a company is not producing the hats, but it's the labor. It's the people that I employ. I might have 10 employees producing these $150 hats. But when the demand goes down for the hats and people no longer want to buy my hats for $150, now I have to cut costs if I want to stay in business. So the way I cut costs, I don't walk into my 10 employees and say, listen guys, I'm going to have to cut your pay in half this month because sales went down. Or I don't walk in there and say, you know what guys, I was paying you $30 an hour, now I'm going to pay you $20 an hour. What they do is they lay people off. They cut their labor when the demand goes down. When people want my hats less, now not only do I have to lower the price of the hat, but I also have to cut my 10 employees down to 5 employees. I got to lay people off so I can stay in business. So this is what happens. And this right here is what makes the unemployment rate go up. Because thousands of companies, now there's less demand, thousands of companies have to lay off workers. And when they lay off workers, unemployment raises. Hey listen, if you're getting anything at all out of this video, do me a favor, smash the like button, subscribe if you're not already a subscriber, and drop me a comment below. What do you think is going to happen with the job market in the next several months? The other caveat to unemployment is that now there's less people in the workforce who can actually afford all of the goods and services that are out there. So when you have a hundred thousand less people working, that's a hundred thousand people that are not going to spend money on certain things because they don't have the steady flow of income. So there's a whole trickle down effect when the Fed raises interest rates. I mean the whole point of the Federal Reserve raising interest rates is to slash spending because that is the main factor that makes prices go down. If they slash your ability or your desire to spend money, companies are forced to not only lower their prices but also to cut their workforce. And that's why as interest rates continue to go up, you will see unemployment also rise. You've had major companies already this year experience large layoffs. The Gap, Nordstrom, Wayfair, Twitter, Alibaba, Peloton, and Ford. I mean that's just a few. I mean there's a whole list of hundreds of companies that have actually already went through and done some layoffs this year and those layoffs are going to continue. There's going to be more major companies laying off large groups of people because they have to cut labor as demand goes down for their products or services. So another thing to think about is this guys, in a free market when you see businesses constantly raising their price and raising their price, it looks like greed and in some cases I'm not saying it's not greed. But I am saying this, if you really want companies to stop raising their prices, it's going to be incumbent upon us as consumers to stop spending the money. To stop buying the product or buying the service. If you want to see prices really go down, stop spending. And when we stop spending, companies are forced to either go out of business or lower their prices. The byproduct of all of the spending and spending and spending is an increase in prices and the byproduct of making money more expensive by raising interest rates is unemployment. Unemployment is going to go up. It's a necessary evil of how the system sort of balances itself out. Now the one thing that you can be doing right now with the unemployment situation changing rapidly as we speak is you could be saving some money in case you're hit by a reduction in the labor market. If you're hit by that, you get laid off, you have some money aside. So if that means not spending money on a big ticket item that you've been thinking about, you might want to hold tight on that purchase because you just don't know what's going to happen in the labor market with your job. And holding off that big ticket item means saving up money, saving up cash in case you need to have two or three or five months of living expenses to the side to pay your bills and still live the way you live right now. But I can almost guarantee you that there's going to be more layoffs. There's going to be more unemployment. The unemployment rate will likely go up in the next couple of months and into the next year. So just be aware of being able to prepare right now for what could happen down the road. On this video, I want to give you an explanation of the connection between the Federal Reserve raising rates and unemployment and also give you an idea of what you should be doing right now to prepare. Building up your cash reserves, building up your emergency fund just in case there's layoffs at your job. Listen guys, if you got anything at all out of this quick video, I want you to do me a small favor, smash the like button, share the video, and also subscribe to the channel and drop me a comment down below. Let me know what you think about the upcoming job outlook in America. Hey listen, the best person to take care of the old you is the young you. Do me a favor guys, take care of yourself and take care of other people. Until the next video, peace.