The Jobs Report is Much Worse Than It Looks

The jobs reports was released this Friday morning and it was bad, like it was really bad. But if you take a look at the stock markets, then you would never know, like you never suspect that. But that's because bad news is good news, which I'm going to explain to you. But first, let's start here. So for the month of September, the expectation was that the labor market would add a net 84,000 jobs. The results came in at 29,000 jobs added. So the report came in well below expectations. It was a big disappointment. And it's not only because of the lack of jobs being added. Now, another point of concern is that, I mean, this is probably not shocking or surprising to most people, is that the government changed the figures for prior months. There were revisions, and of course they were down. Okay, so the revisions were not good. In July, the original report said that, well, the jobs report said that the labor market added 21,000 jobs in July. Now they're saying that they overstated that amounts and they revised the July figures down from 21,000 jobs added to negative 10,000. So in other words, the labor market lost jobs in July. August was originally reported as 162,000 jobs added. And now it's been revised down by 29,000 jobs to 133,000. Okay. And for September, like this current report, it says that the labor market added 29,000 jobs, right? But most likely, this is just my opinion, most likely we lost jobs in September. It's going to get revised. Of course it could get revised up or down, but I mean, we're going to know after the midterm elections. Now, I want you to take a look at the monthly chart for the past five years. Look at how many jobs are being added each month in 2022, and even in 2023. In 2024, that's when the labor market, I mean, take a look, it was struggling. Since 2025 though, when things basically started falling apart in the labor markets. In the past 21 months, we've had seven months of job losses. If September turns out to be negative, then again, it's my opinion that it will be, then that's going to be eight months of job losses in the past 21 months. So as you can clearly see from the chart, the labor market continues to weaken. Now, another piece of bad news is that the unemployment rates went up from 4.1% in August to 4.2% in September. Now I want you to keep in mind that this is the most important number for the Federal Reserve when they're assessing the labor market. So I want you to keep that in mind for the rest of the video. Okay. Now I just want to say that I have two more pieces of bad news for you, and then don't worry, we're going to address the good news as well. So the report says, okay, this is a bad thing. The report says that wages are increasing at a rate of 3.1%. However, the rate of inflation is higher than that. The most recent CPI inflation report by the government states that the rate of inflation is at 3.4%, of course higher than wage growth at 3.1%. Now I do want to point out, and I'm just being honest here, that hardly anyone believes that the true rate of inflation is at 3.4% reported by the government. But even with the government reported figure of 3.4% inflation, that's still higher than what the government's saying that wages are growing by 3.1%, and that's very bad. So what I'm saying is that, in my opinion, if the government says that wages are growing by 3.1%, it's most likely growing by, you know, something under there, 2 point something percent. And if they're saying that the rate of inflation is at 3.4%, I'd say the true rate of inflation is closer to 6%. That's what the money supply is growing at for this year. In other words, the average American household is getting financially pummeled, like it's a financial beatdown. Okay, I want to give you one more piece of bad news, and then we're going to move on to the good stuff, the good news. Okay, so the bad news, the last piece, is that interest rates saw no relief today from the jobs reports, because normally when we get a bad jobs report, interest rates will fall. But nope, not this time. Interest rates initially saw relief in the morning, but then they just climbed higher throughout the day. So this is the 10-year treasury yield. And listen, it's the same for the 30-year yield as well. So this is not just a huge problem for U.S. consumers, but it's a huge problem for the U.S. governments and the Federal Reserve as well. I mean, we're going to have to dedicate a separate video to this issue, so I'll just say, like, please subscribe, because you're not going to want to miss that one, because I'm telling you, the vast majority of Americans have no idea, like, what is coming. All right, so we made it past the bad news, and now we can talk about it. Let's focus on the good news. So the good news is that the jobs report was so bad that it makes the Federal Reserve less likely to raise interest rates. The next Federal Reserve meeting is going to be on October 28th. And before the jobs report, so we're talking about a week ago, the odds that the Federal Reserve would keep interest rates the same was at 35.8%. Now, the odds of that happening have increased from 35.8% to 77.3%. So that's a good thing that, I mean, we don't want the Federal Reserve to raise interest rates. Okay, so let me explain this. The Federal Reserve has a dual mandate. Their mandate is to keep inflation under control and make sure that the labor market is doing well. So in other words, price stability and maximum employment. Okay, well, what's the situation right now? Well, the labor market's not doing well, and raising interest rates, that's going to hurt the economy and also the labor markets. Therefore, because the labor market is struggling, there's a smaller probability that they're going to raise interest rates in October. Therefore, bad news is good news, which is why the stock market is up today. You would think that a strong jobs report means that the labor market is doing well and the stock market's going to go up, and a bad jobs report means that the labor market's doing bad and the stock market's going to go down. But no, that's not how the stock market works. So the stock market is driven, or I should say fueled, by easy money. So the stock market is not a representation of the economy. The stock market is not a representation of the labor market. The stock market is driven by monetary policy. So I just want to say that if you didn't know that, I mean, I want you to be aware of that, and I want you to just wake up. Wake up to how this works, because just think about it. Back in 2020, what happened? The economy plummeted, unemployment skyrocketed, and the stock market surged. You know, why did that happen? It's because of all the money printing and the easier monetary policy. And that's what we're going back to, in my opinion, and I'd say that most likely in 2027. But listen, I do not want you to misunderstand the situation. The labor market's getting worse, right? But that doesn't mean that the Federal Reserve is going to start cutting interest rates right away, like right now, no. That's because, again, the Federal Reserve has a dual mandate. They still have to deal with inflation. And the market expectation is, and this is according to the CME FedWatch tool, that the Federal Reserve will raise interest rates at the December 9th meeting, and that's going to be the last meeting of the year. Currently, there's an 86.5% chance that the Federal Reserve raises interest rates at the December meeting. So most likely, no interest rate increase in October, but it's most likely going to happen in December. Now, going back to the labor markets, it was technology that cut the most jobs in September. There were 10,799 cuts. That's up 77% compared to August. And the tech sector cut 54% more jobs in the first nine months of 2026 compared to the first nine months of 2025. And tech accounts for 29% of all job cuts in 2026. And so far, up to this point in 2026, AI has been cited for 120,136 job cuts, and it's the number one reason for job cuts this year. So to summarize, tech employees continue, I mean, they're continuing to get hit the hardest, and AI is the number one reason for job cuts in 2026. All right, so that was your labor market update for today. I truly wish I had more good news for you, but I don't. Well, today's Friday, so that's something to be happy about. Happy Friday. All right, please subscribe. Thank you for the support, and I wish you a very nice day. Take care.