oh boy y'all almost got me I almost flipped I almost flipped it's like ohoo that Temptation oh my gosh I I wow yes ah that was that was very close for those of you who know what I'm talking about great for those of you who don't know I'm sorry but we are going to talk about that job's data yesterday and frankly I didn't post video yesterday because it literally took me well I was also flying for house hack and looking at properties but in between doing all that it it essentially took me the last 24 hours to really figure out and understand what is going on what path we're on where we are in the economy now and what you need to look for as well as potentially how to position a portfolio around this now because I did not post yesterday In fairness to all those of you who are curious yes I'm going to have a big portfolio talk on Monday where I talk trades companies and hedges and any kind of adjustment trades potentially millions of dollars worth on Monday in the course member live so I did extend the coupon to 11:59 p.m. on Sunday because I didn't post yesterday and there was no reminder for you so if you want to be a part of that course member live on Monday and you want to get that for life all the future course member lives we do that or analyses fundamentals trade alerts you name it go to me kevin.com bu the stocks and sight course watch lecture one you're in forever okay great so let's get into what happened and it is true when when I first heard this data that the last two months the prior two months so uh July and August which were pretty bad were revised up by a net of roughly 70,000 jobs and September was absolutely phenomenal I have to say I was a little blown away I I thought to myself my gosh okay well if all the bad data is being revised away GDP is being revised away construction job openings being revised away and now a jobs being revised you know the bad is being revised away like the Bears were right to be bearish but if it all the bearish data they were using is being revised away then the Bears are wrong to be bearish so then I'm like oh my you you have to flip then so the last 24 hours have gone deep and of course we already know the basics we we know the headline numbers we know there's a lot of talk about how the establishment survey showed uh over 800,000 government jobs created but the establishment survey actually shows that 800,000 jobs as Jobs created on the uh non-seasonally adjusted side and when you seasonally adjust that goes to about 31,000 and honestly in the establishment survey that's actually Fair because those are almost all teachers but there's there are deeper problems including what the household survey says I will explain those differences in moment it does get a little nuanced and I'm sorry in advanced but again it took me like 24 hours to get through this so an analysis uh starts with what yields have done since jpow you know gave us a 50 jpow gave us a 50 and what happened we literally got the 10year yield up 32 basis points the 2-year yield up 38 the one year is up 26 mortgage rates are up about 50 basis points we've essentially gone across the entire yield spectrum and we've made everything tighter not looser which is fine if you have an inflating economy and a strongly growing economy it's okay you would want to tighten rates in that case so you don't you know overheat essentially and create inflation which I don't think a good economy is synon synonymous with inflation anyway Cathy wood agrees with this whether you like her or not doesn't so much matter but what really creates well if you're Peter shiff it's the expansion of the money supply but to me what really creates inflation or consumer prices going up is frankly stimulus otherwise Innovation uh really leads to deflation the more we invest in capex the more deflation we get look at China they're frankly in deflation people like oh but you know this is going to cause inflation all the stimulus they're so deep in the hole they're so deep in the hole this is really a topic for a different video but uh the Point here is that you you know you would expect yields to go up if you thought things were really really good so I thought okay well maybe things are really good maybe I shouldn't be a bear and let me go deep in this jobs report so my take when I look at the jobs report and it's going to be you know I'm going to give you a little preview and then we'll go through some of the details my take is that we're roughly at stall speed on a plane now now maybe yall don't fly I I I don't fly I'm not a pilot okay but like let's say you're coming in for a landing with my little toy jet here okay so so you're pitched down a little bit you know 3% I don't know 5% whatever so you're pitched down but the plane's just going so slow that you're not going to make it to the runway now you could nose down but then you're going to have a hard Landing you're boom you might break your landing gear or just crash okay so so you don't want to nose down too much now you could keep your pitch but you're going to have to add speed because if you're at stall speed you you you like you need to speed up your plane again I'm not a pilot I'm trying my best here okay you need to speed up you need to add some gas add some thrust everybody likes some thrust right so we're flying a little too slow to actually make it to the runway safely we really need speed boost uh and then we'll be okay if we pull up without adding thrust then we're just going to literally stall that's not going to be good gosh I never thought this would actually become useful uh oh I just Tangled it I okay well I'll have to untangle that God that looks terrible I now have to untangle that uh right as I say I never thought this would be useful it actually becomes not useful it's foreshadowing of the economy no uh okay anyway so uh the the problems you have here uh really start when we actually get into the reports on what generally happens on an annual basis now this gets a little tricky so there are few things to look at the first that I want to look at is something called the uh level of unemployed people usually working fulltime now this by itself isn't solely useful we have to look at a lot of things here but let's go ahead and look at usually full-time if you look at this it kind of helps us understand this stall speed that we're at because if you go into the 82 or 80 recession you have a rapid crash if you go into 91 you have a rapid decline in this you go into 2001 rapid decline 2008 rapid decline what do you have over here you have a stair step decline kind of like a stair stepper at the gym decline okay that is that normalization I don't know stair step okay is that normalization from the big spike I don't know stair step oh gosh now we're negative so the year-over-year change in people employed usually full-time is now negative which means we have fewer people you like employed full-time who usually are employed full-time which is generally something you only see at the earliest Midway through recession so who knows maybe we're already in a recession we we generally don't know if we're in a recession until like a year later right so you could already theoretically be in it or you know maybe maybe this time it's happening a little earlier who knows you were negative over here at the early portion of the 2001 recession which would be like March of 01 so it could be like technically in it or right at the beginning of it or who so this alone is not helpful but it does show us that the stall speed is present because if we're really growing we should be seeing more people on a month-over-month basis working full-time so again I call this the stair stepp or slowdown and it's why I talk about stall speed this is really driving me nuts I apologize uh for this like just just look away for a second but I I see it in the uh the video monitor and it just drives me absolutely nuts I cannot have I'm like jpow okay I got to I got to fix this I cannot have the plane like this it's maybe it's an OCD thing uh uh now I've really just janked it up there we go I definitely screwed something up but uh here all right it's a little better now I apologize ol for wasting your time please fast forward the video and if for whatever reason you can't then uh once again I apologize I'll fix it later this is a lot better than the stra that just doesn't look good anyway all right so next this is where things get really like really start getting really interesting the typical employment level that we have in our economy uh especially through the '90s is around 2 million job gains created on an annual basis keep in mind we still have some real serious like juice to get to don't get me started on table A8 okay it's it's going to be pretty bad uh but what I want you to do and you could do this yourself too is just type into Google St Louis Fred uh employ employment level that's Fred with an r in there I I know that's weird I I still haven't figured out why they do that I think it's Federal Reserve economic data but whatever okay so when you get there what I want you to do is I want you to just do change from a year ago in thousands of people okay uh and then it's so noisy on the monthly so change this to annual and then what I want you to do I mean you could leave Co in here if you want uh if you want to just make it a little bit more clear you you could get rid of Co just by scrolling over on the right but let's just leave Co so we'll leave the chart as it is look at what a normal economy looks like for a moment okay a normal economy sits in this range right here I think we can all agree that a normal economy somewhere in this range right and look on the left that would be somewhere between 1 and a half to maybe 3 million jobs created per year right that's a normal economy in fact if you look at the '90s you were at a normal level of job creation throughout the entire '90s okay that's interesting so where do we sit today relative to that level of job creation well we sit in a worse place because so far we don't have this full years of data but if we're trying to get to 2 million jobs created in the year on the employment level where do we sit right now so far year to date with three quarters being done we sit at 314,000 q1 we lost 248,000 jobs so q1 that's when you get the layoffs uh that was 2024 Q2 you got 62,000 jobs Q3 you got 264,000 add that together you're only year-over-year or actually for this year you're only up 314,000 jobs which actually aligns with if you go all the way back to last September you're also roughly up about 300K jobs so in other words like since last September we've really been at that stall speed where were like oh we don't have the thrust anymore oh boy you know when you're on a plane and they like pull back on the on the uh thrust because you're you're getting ready to land or like you just took off and then they pull back on the thrust and it's that like weird sinking feeling you get like it's like oh what's happening and really the pilots are just trying to like level out or whatever but everybody's always like oh my God we're crashing like that's kind of the feeling the Bears are feeling right now like okay so so far year over oh let me clarify this year over-ear we're at 314,000 jobs created from September to this September that's way lower than the 2 million if you actually add together just this year - 248 62 264 that's actually only 76,000 jobs created so far in the 9 months this means the next 3 months are going to be extremely critical because you need October November and December to be really freaking good so you could get back to that normal growth period of around 2 million jobs created so now I'm going to show you this screenshot because it's really helpful okay here's the red line this is what we were talking about with the 90s right here where my M Mouse is right and this is the normal trajectory I did Kill Co out of here because it zooms in on the chart makes it a little bit more clear rather than having the big spike up on the right okay so you normalize this look at the times it went near negative on the red line which is the annual every time it goes near negative you have this green circle you have a recession so every time near negative recession okay like every single time there's not a time over here it goes to near negative that you don't have a recession however there are times it doesn't go to negative and you still have a recession see over here so it's like either way if you go negative you always have a recession if you don't go negative you could still have a recession because that's happened before over here but having a low change in thousands of people so millions of people here of job gains having this be at you know for the year 76,000 is horrible it's really bad because you're close to that that threshold of like guaranteeing a recession okay but Kevin like the job's data was so good are you just trying to look for like bearish information okay well I I get it I I I like let me just be transparent I want IPO house hack like ASA freak compete if we go into recession that's going to be harder if we don't go into recession let's freaking go you see what I'm saying okay so like I don't want any recession I just I just can't help myself I'm looking at this data so people like but Kevin the jobs numbers were so good it was such a big number okay well what happened in history well right before the 1990 recession in July we started the 990 recession in may we had a job read of 299,000 huge Spike look at that green circle right here is this is where you really start turning negative into recession but look at the blue the blue shows you this huge Spike that you get the blue is actually the quarterly but I read it on the monthly and on the monthly read you're at 299 this is a huge Spike over here and you still went into recession cuz the data is so freaking volatile on the month over month look at March the month the recession began employment spiked up 171,000 in households data and 3 months earlier you spiked up 292,000 so in other words you had these giant job reports right before the 2001 recession literally just two three months before the recession you had these giant really glorious jobs reports and then you look at 2007 literally November of 2007 like right when the recession was beginning 649,000 jobs created that followed -2 98 in October which came after two or 562 in September look at the volatility the recession began in December right before that it's like Yay Oh yay crash so like over the past three recessions outside of covid household jobs spiked 171 to 649,000 in a single month report and we still hit recession and my guess is back then the markets also rallied on these reports recession still came because jobs is a lagging freaking indicator so like the month over month data doesn't matter what really matters is is this like how many jobs are we actually going to create this year well right now if we're at 314,000 you look at this right here I drew this red line just to show you if this red line on the left is normal it's going to crash you're going to crash to oops you're going to crash to this low level right here which would be uh this is the which is in line with the quarterly numbers so that's a really really bad pace you're actually probably you know if I actually get the number over here that's pretty bad if the annual number is all the way down here you're basically on the doorstep of recession the annual number the red line should be stable around here in an expansionary time again we need October November December data to get us up because right now you know I drew this line to 314,000 going year year to September but we're not even at 314 so far this year to date again we're at 76 which means we're basically I know this chart's funny we're probably like right there on top of the black line and if these three reports come in negative we will be in the hole and you're basically going to guarantee a recession uh okay and and usually you get Negative job reports after a really big positive report we just got a big positive report now why well how about because of revisions ah now this is an interesting one buckle up for this one folks you're going to want life insurance for this one metkevin.com life paid promotion you're going to want to get the courses on building your wealth to know what's going on with the portfolio on Monday because this chart is this is insane you do not want to see this chart okay I'm going to show it to you okay it's a table damn it Kevin you said chart clickbait I'm sorry I'm sorry sorry okay look at this you don't find this table unless you dig down into A8 on the uh like like literally their 100 page document or whatever it's crazy and if you go to government workers this was insane first of all there's the establishment survey which I opened this video about I said 800,000 non-seasonally adjusted uh teachers got adjusted to 31,000 establishment jobs okay fine fine that seems normal because they're mostly local right but wait a minute because they seasonally adjusted away all of those teachers government workers should basically be close to zero because teachers are going back to work but wait a minute government this is the household report not the establishment report household is they call workers hey you got a job cool payrolls means they call companies payrolls is the establishment one it's a little confusing okay that's why I said we're going to get new want here if you look at the household survey the seasonally adjusted read right here from August to September exploded from 21.4 million to 22.2 million that is a seasonally adjusted 785,000 gain that is unprecedented and it's absolutely insane look at this July to August you were like - 150 plus 40 this is like plus 50 you know like these these numbers this this is crazy I don't know what the hell happened here with the seasonal adjustment number but 7 85,000 on the seasonally adjusted one so you're telling me all the teachers that went back to work you adjusted them out and you still got 785,000 job gains on the household survey which the household survey is the one that dictates the unemployment report so if you took out all of those the unemployment rate instead of going down would have gone up to like 4 and a half% what what and on the non-seasonally adjusted right here you're up 1.3 million again that's probably where the teachers are the difference between those two numbers but this seasonally adjusted you still came in with that high of a number that changed this entire report because when you actually look into like restaurant jobs they were negative and then seasonally adjusted positive even though we know restaurants are in the freaking pooper right now so you know a lot of people are saying okay so you know why like is this political is this you know just trying to elect KLA Harris maybe it's possible absolutely possible I I'm I like I don't try to be jaded like that I think it could also just be that the Bureau of Labor Statistics doesn't have all their data yet and the adjustments they're making aren't that great uh uh so that's not great and that means we're going to get revisions as they continue to get data remember this jobs report came out on October 4th they're going to keep getting data out over the next two or three weeks so they can help revise September numbers probably going to get a big downward revision here because this is crazy this was like a 3.7 Sigma standard deviation uh above expectations read this is it's insane uh so okay so where what do you need going forward so going forward you really need to add like 1.5 million jobs in October November December can it happen and would that make Kevin bullish yes it can happen in q1 of 2023 we actually added 1,500 1.5 million jobs so yes one quarter can change everything we could literally have a really good October November December and confirm the soft Landing that would be thrust like what we're talking about with the plane thrust if you get three quarters in a row now of not this crazy government jobs boost but like actual like growth in jobs soft Landing stuck hats off bare thesis dead that's what you need so you really like it's crazy but you kind of have to now wait until like February to confirm there's no recession because then you get the January jobs data to see if there giant layoffs there but you'll also have the full Year's data which I guess the full Year's data you'll have in early uh January but anyway so this is crazy if you also look at a chart of the magnitude of the seasonal adjustment versus what you historically see this is the chart you get this shows you how crazy this September seasonal adjustment is the orange here is the uh non-seasonally adjusted let's take the seasonal adjustment the blue okay so just look at the season again usually this is adjusted down because of all the teachers well why all of a sudden is this 785,000 and in September of 2022 it was less than 400k in 21 it was negative in 2020 it was negative in 2019 it was less around 300K in 2018 it was nominal 2017 nominal 2016 it was like 100k why all of a sudden this huge magnitude and then of course right before the election I mean again you know again that's that's the Jade I really I try to be neutral and not like super politically jaded but this is it is odd so if the economy truly is weak and the jobs data is wrong now you have a real problem because if the jobs data is wrong it means you are stall speed and you're losing thrust at the same time as you're losing thrust and you're at stall speed Jerome Powell is kicking up the flaps which basically is increasing your drag and so now your speed's falling even more so you're contributing to the decline with higher rates because of what we talked about at the end of the at the beginning of the video this is crazy so then you look at the yield curve we're almost back to inversion well GE we're 4.8 basis points uninverted when is the last time we've actually gone from inversion to uninverted by about 20 basis points the same we hit this like a couple weeks ago where 20 basis points uninverted to basically back to inversion well you did go back to inversion in 2006 right before the 2007 you know end of 2007 uh December of 07 the recession began um so this has historically happened like you can Bob around this line usually recessions don't actually begin until you're about 50 to 100 basis points uninverted we only got to 20 so again at that stall speed we're like yes we can add thrust and keep going we can keep this freaking plane flying but it's tough because add to this you know some of the other recession indicators housing starts versus completions at 1974 lows 1980 lows you know pre-2 2008 recession lows really really bad you know 1995 didn't look like this restaurant performance index so low it's recessionary a number of unemployed people 27 weeks and over at you know at least onethird of the way into recession ISM Manufacturing payrolls were horrible the Challenger report for payrolls was absolutely trash 9 out of 12 fed beige book districts uh declining uh the temporary hiring uh stretch largest negative stretch of readings for temporary hiring waning pricing power at companies delinquencies I don't know man I don't know so my take is that uh on Monday we're going to be talking about uh Hedges we're going to be talking about portfolio allocations uh there are a couple ways to go here you could either go long Equity with Hedges or you could go cash with Hedges it sort of depends on on your POV but there I think there are some really neat things you can do especially where certain retracement levels sit now we're going to talk about that in the course member live stream hope you're there use the coupon code before Sunday at 11:59 p.m. I got to go to my Mastermind I love you all thank you so very much for being here we'll see you all in the next one and if you want to join the next Mastermind these are all like millionaire entrepreneurs I mean this is this is a really great group of people go to meetkevin.com Mastermind and uh maybe you can get in on the next one thanks so much goodbye and good luck do not advertise these things that you told us here I feel like nobody else knows about this we'll we'll try a little advertising and see how it Go congratulations man you have done so much people love you people look up to you Kevin PA there financial analyst and YouTuber meet Kevin always great to get your take even though I'm a licensed financial adviser licensed real estate broker and becoming a stock broker this video is not personalized advice for you it is not tax legal or otherwise personalized advice tailor to you this video provides generalized perspective information and commentary any thirdparty content I show shall not be deemed endorsed by me this video is not and shall never be deemed reasonably sufficient information for the purposes of evaluating a security or investment decision any links or promoted products are either paid affiliations or products or Services we may benefit from I also personally operate an actively managed ETF I may personally hold or otherwise hold la or short positions in various Securities potentially including those mentioned in this video however I have no relationship to any issuer other than house act nor am I presently acting as a market maker make sure if you're considering investing in house Haack to always read the PPM at house.com