The Job Market is in BIG F@#KING TROUBLE
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The U. S. Jobs market is in big. I think trouble and IT isn't even really about the october payer report.

While hurricanes and strikes have raised issues about the latest update, the actual employment situation was getting worse long before we got here. The vice figures and the current member showed that summer time was indeed as bad as we thought. IT wasn't may be even worse.

To start with, september's huge soft landing is confirmed estimated, instead proving to be another irrelevant outlier, just like the one in may. What followed me was shockingly bad, thus why the markets reacted the way they did to the economy, not the data. The data has taken a few months to catch up to IT.

Now that IT has what they show is everything that we've been talking about. For example, the establishment survey now shows that private payroll, private payroll after may, we're under one hundred thousand in every month, but september in August, private payroll now revise was uncomfortable ly close to zero after the outlier rebounds. September, the october estimate comes in at minus twenty eight thousand.

Now there is definitely weather and the boeing strike in that minus, but they're sure wasn't any of that in August. Now all of the spoils, the soft landing narrative. So you can see IT all over the main trip. Suddenly the payroll data is noisy.

They all say, and while that's true, the noise is always one sided, such as in september, through the first nine months of this year, the B L, S has revised away four hundred and five thousand job game out of just two point zero nine million yeah, that's twenty percent. And that's even before we get to october the household survey, which to be a admitted wasn't impacted by storms at all. That one dropped sharply october, but more importantly is negative for the last thirteen months running.

Plus when you count for labor participation, which the bill does not, the unemployment rate really should be about four and a half N A new cycle high. This is not about october. The latest numbers, whether or not merely indicate the well established unintended previous trend, is getting worse.

What the establishment survey shows is that first september was, like me, just one of those noisy, positive months that shows up from time to time. And second, the job market stumbled badly and I mean, badly pick particularly private payroll during the summer time. And where have we heard that before from the gold's estimates to private businesses and what they've been reporting, we've got to Carry trading going on in japan or unwinding in japan.

The income data that I over a couple days ago, all of IT, pointing to the same thing that the revised establishment survey, plus the october number show was in a labor market in the U. S. Economy that stumbled badly in the summertime.

The headline establishment survey increased by just twelve thousand in the month of october. That was way less than obviously september. That was also substantially below expectations.

Expectations were on average for around one hundred thousand other. There was a wide disparity vary expectations because nobody really knew how the weather would impact the hurricanes, everything else. However, despite that, the number came in well below expectations because there is material weakness that isn't just related to hurry anes or the boeing strike.

What what the bls actually said about the hurricanes was in october, the household survey was conducted largely according to stainer procedures, and the response rates were welder than Normal ranges. The initial establishment survey collections rate for october was well below average. So that's where you get this sudden mainstream impulse about noisy data.

However, collection rates were similar in store affected areas and unaffected areas. So the bls is even saying that the collection rates have not really don't have anything to do with the hurricanes at all. A larger influence on the october er collection rate for establishment data was the timing and length of the collection period.

This period was arranged from ten to sixteen days, less than only ten days in october and was completed several days before the end of the month. Because the they pay a reporting date, november first, is early in the cycle, and they further continue with a bls here. There was no discernable effect on the national unemployment rate from the household survey, which was actually pretty bad in the month of october.

So you can wish away the weather all you want. IT didn't really raise the variability in the collection process there for the variability in the data, though there was obviously some actual impact on the ground. We may not know how much IT is, but as I keep saying, IT doesn't actually matter.

The noisiness was september, not october. And even according to the bl s household survey estimates, for those people who report they cannot work due to whether that number was five hundred and twelve thousand in the month of october. But we've seen this before.

There was more people who said they couldn't work reported because of weather back in january, back when there was a cold weather snap and blizz conditions across much of the country back then. And he didn't seem to impact the establishment survey at that time. Now did IT IT was even a big number of people saying they couldn't work through the weather in july.

So the fact that the weather did impact the economy in the labor market, I mean, that's that absolutely happened. But IT does not explain the level of weakness that we're in. But for the mainstream media that is completely invested in the soft landing, nearly anything that jay Powell says, september is a perfectly good number that we can rely on an october, a bunch of weather and bowing strike noise.

Give an example. This board is not farm payroll report for october certainly should be taken with a grain of salt, possibly a whole shaker. According to rick pulse.

Sanea, who's a senior market strategies at the ft. Institute, IT appears that this drop was significantly affected by hurricane e sileni milton into a lesser extent by the boeing strike. The unappropriate rate state stay at four point one percent, and IT is not affected by storms and strike, but IT is affected by as well.

See H A bunch of people dropping out of the labor force yet again. The household survey, which was not impacted by whether had its biggest decline in several months. And as I said in the introduction, IT is down for a prolonged period, which is consistent with everything else that we've been saying and seeing hours, lack of hiring, lack of quitting, the jolts numbers, income data, IT all points to the same thing and the establishment survey does.

Even before we get to october, remember where we were back in early August that triggered the Carry trade verse and everything else early August, the payroll report was relatively low, is initially estimated just above one hundred thousand. It's actually have been revised slightly higher since in one hundred and forty four thousand. But then August came out, and IT seemed like everything was Better among moving on the right track.

The B, L, S, reported the following mountain, september that the August pair s smet was one hundred and fifty nine thousand of moving in the right direction when september comes in at two fifty four. And nervous like recession, what recession now we're into. The soft lending has been confirmed by single pay report in september, but IT wasn't just pteor IT was the increase in August that look like the the job market was heading back in the right direction.

Now according to the latest revisions, August was actually even worse than july had been, and even the initial report in july and september not not so robust. IT first appeared. So now we have july at one hundred and forty four thousand, August rather than being one hundred and fifty nine in moving in the right direction.

Now the bill s says, oh, no, IT wasn't hundred and fifty. IT was actually seventy eight. So I go from one hundred and fifty nine to seventy eight. Imagine what would have happened in early september had to be less.

Instead of saying one hundred and fifty nine, said we went from one hundred and something to seventy eight, he would have triggered a completely different reaction at the time. So instead we get seventy eight for August, september, revised down to two twenty three. And now all october comes in at just plus.

Whether or not this hurricane and strikes IT doesn't really matter. The trend is there. And keep in mind, you always keep in mind that these numbers as they are, even the revised ones that get revised lower on the short run basis, it's actually even worse.

The baseline, the Q C E W, which in twenty twenty three to early twenty and twenty four is going to subtract about seventy three thousand per average off the payroll report numbers. Even given the B, L, S, the benefit of double with these revise estimates, the summer time still looks like basically everything else. There was a bad stumble in the labor mark.

And as I said, it's even worse when you look at just private payroll going back to june, june payroll prefer just firms was less than one hundred thousand already that that was repeated in july with just ninety nine thousand. And then initially to be a reporter for August, a slight increase to one hundred and four teen thousand. And then september comes in a two twenty.

So IT looks like the the labor market, the private labor market bottoms out around june in july and then starts to get Better in August in september. But now after the revised estimates, what the bill shows instead is ninety seven thousand june, ninety nine thousand july in just thirty seven thousand and August before a lester er one ninety two in september, the outlier there and then minus twenty eight in october. So october if you take away the hurricanes and the strikes, probably not gonna be minus twenty eight though again in the factor.

And the other bench record visions that are coming in reality probably is closer to zero than not. But IT continues the same trend. It's the september number that shows up as the outlier, the noise, the establishment survey, even the establishment survey, after we get through these revisions, looking past weather and strikes, what IT shows is that the economy, the labor market, is indeed in, eh, big trouble.

We look at the establishment survey by a couple industries. Manufacturing is obviously impacted the most by the boeing strike. And manufacturing jobs fell by forty six thousand and october, but the strike only impacted around thirty three thousand workers.

So even without the strikes, there was likely to decline to manufacturing jobs in october, which would not have been the first time. In fact, over the last five months, manufacturing jobs have contracted and shrunk in for those in the total, over those five months is minus eighty eight thousand. So even if you have thirty three thousand due to boeing, which is what is what is reporting, you still have around fifty thousand job being lost over the last five months of manufacturing anyway.

And it's not just manufacturing. Look at retail job. Retail jobs have been down in four or five months since may as well.

And over those five months, minus twenty eight point six thousand, with only six point four thousand job laws in october, temporary jobs absolutely crashed in the month of october, down almost fifty thousand in the single month of loan. But temporary work has been down substantially over all five months. In fact, it's been revised quite a bit lower.

Temp jobs are collapsing here, which is a critical cyclical signal for the entire economy. The easier thing to do when you're cutting, trying to cut in control your labor cause is to get rid of temp workers. You don't have to fire own employees.

You can fire your employees that are someone else. As so temp jobs have crashed by by nearly one hundred and fifty thousand over the same five months pair. That's not a good sign.

And because of that, professional business services jobs have been basically on the same level lower, which means that other professional business services industries beside tempt workers are not hiring anybody either. So there's no hiring there. There's tons of job losses, and that's long before we get to october.

So in these highly cyclical industries, and we are highly cyclical indications, it's not about october. All it's about it's about the clear deceleration and clear deterioration. The cyclical industries in employment leading up to october, september was the outlier.

That's where the is, not october and storms and strikes. As the bl s said, the hurricanes did not impact the collection rate or anything that they could tell on the household survey side. And the household survey drop by three hundred and sixty eight thousand, which is the first declines since the month of may.

And we look back over the last six months, again, showing you this, this is not just about october over the last six months period. The next change is just five thousand. And going back to the last thirteen months to last year, we noted that there was inflection of labor market.

The household survey measure of employment is down fifty four thousand over more than a year. It's not really about the job losses there as IT is confirming the lack of hiring and not just an october, but for a very period full time jobs. On the household survey side, those fell by hundred and sixty four thousand in the month of october.

But over the last six months, full time jobs are down almost four hundred thousand, and going back to the same thirty months period, full time jobs are down more than six hundred thousand. Part time jobs have been making up for some of those full time jobs. Over the last six months, part time jobs have increased by two hundred and sixty thousand.

And over the last thirty months, I ve increased by five hundred and eighty six thousand. So when you put all these together, you can see what's happening, exactly what we've been saying cording to the house sold survey. Employment has been flat, which is just like jokes toling us that no one is hiring.

Full time jobs are being converted to part time jobs, which is the cutting in hours. Employers are taking protective steps to control their cost. And theyve been doing this for for more than just the last few months.

As i've been saying since last year, the number of mack economic accounts that looks solid and soft landing and strong and resilient continues to migrate toward downturn, recession and maybe even worse. And we ve got to the point where it's gone on so long and got to be so far. Even the establishment survey is more and more looking like the household survey in everything else.

There's a consistent picture that just isn't the one that everyone went like IT to be. It's not a recovery. It's not a resume and strong economy. It's not a soft landing. It's one that more and more resembles what you see entering recessions as far as the unemployment goes well in the month of october that was affected by two thousand and twenty thousand former workers dropping out of the labor force. So while the housework survey dropped by nearly four hundred thousand, that meant the the number of official unemployed increased by one hundred and fifty thousand.

Two thousand, twenty thousand dropped out of labor force, so the unemployment rate ticked up a little bit, but not enough to flip and round up to four point two percent for four point one percent where had been in september. But if you actually adjust for all of these labor force dropout, when you mean to keep the participation rate consent where IT was last fall at the peak, the number of unemployed is undercounted by more than six hundred thousand. If you put those back into the to the actual labor force, and therefore the unemployment rate calculation, that would make the adJusting unemployment rate four and half percent, which is a new cycle high.

So on an apples to more apples comparison, unemployment continues to pile up because there is no hiring, hours are being cut, americans don't want to quit their jobs, incomes are slowing down as a result, and even the establishment survey is showing exactly the same thing. The jobs market is indeed in big of trouble. So even without hurricanes, october was gonna be weak.

Anyway, we see that in the mister expectation. So plus twelve thousand overall, minus twenty private, even without strikes in hurricanes, you're at a low number anyway because they've been low numbers all along just now that the the B, L, S. Is getting around.

With its revisions to reflect that reality, september was the outlier. There was weakness heading into the economy and a big stumble in summer time. And as I keep pointing out, this is even before we get to the benchmark revisions, which are long ways away, we won't get to twenty, twenty three, twenty twenty four revisions until next march.

And then the revisions that are likely to hit where we're talking about now will be the march after that. So keep that in mind as we go forward. But private payrolls, they were almost certainly negative during the summer time rather than accelerating looking toward a soft landing after a short run.

Bottom ing. Unemployment continues to rise when you factor labor force dropouts. The jobs reports aren't noisy. They always are. But that noise wasn't october IT was september.

Reality has a way of intruding, and reality means that the establishment survey begins to more more resemble all the rest of labor ate market data that is suggested we're on the road to recession, if not already in one. Already the jobs market is in big of trouble, and even the establishment survey says, so how does all of this happen when GDP looks so solid? Has looked solid for quite some time while I went over that in the video link below.

As always, thank you very much for joining me. huge. Thank you, your family, university members and URL university subscribers. And until next time, please take care.