Ep. 165: Markets In Denial About Jobs As Trump Lets Truth Slip About Debt

* Today we got the government's Non-Farm Payroll report, otherwise known as the Jobs Report, for the month of April and pretty much all the mainstream Wall Street guys were looking for another strong report * In fact, earlier in the week Goldman Sachs was out saying that the 200,000 consensus estimate was too low! * The optimism was unfazed by the much weaker than expected ADP report I spoke about on my last podcast on Wednesday, which came in much lighter than expected * So, people didn't care, they said, "That's a one-off event, we're still looking for a good number, and we got a weak report * Instead of 200,000 jobs we only got 160,000 jobs * And they actually revised down the last couple of months * But let's get into some of the details, because it gets worse, the further beneath the surface you look * The unemployment rate held steady at 5%; they were expecting it to notch down to 4.9% - that did not happen * Private payrolls also much lighter than expected; they were looking for 195,000; they got 171,000 and they revised down last month's from 195K to 184K * They did get the .3% increase in average hourly earnings, but they forgot to point out that they revised month's .3% increase down to .2% so you can chalk that one up as a miss, despite the fact that nobody was talking about it * The bigger miss was in the Labor Force Participation Rate * Last month it was 63%, which was a move up, but in April it came back down to 62.8% * 562,000 people left the labor force during the month of April * A massive exodus led by young people * A breakdown in the Household Survey for ages 20-24 reported 155,000 job losses in April * For ages 25 - 54 - 284,000 jobs losses * For ages over the age of 55 - this is the highest it has ever been * Janet Yellen still wants to pretend that the reason the Labor Force Participation Rate is declining is because the Baby Boom is retiring - how much longer is she going to get away with that lie? * The Baby Boom is too broke to retire * The people leaving the workforce are young people in their 20's and 30's * A breakdown of job gains by sector shows the biggest sector is professional business and temporary services - 56,000 gains * Healthcare and education was high, and leisure and hospitality came in third * Manufacturing barely gained any jobs after a huge loss the prior month * Wholesale trade barely gained any * Construction, after a big jump last month - only 1,000 jobs * Retail trade lost 3,000 jobs * Mining and logging continues to lose jobs * On a good note, government actually lost jobs * That's a good thing - we don't need so many people working for government - they're not productive * Rick Santelli made a very good point today on CNBC, talking about all the jobs created at the TSA * We're not better off with those jobs - they decrease our productivity * As I mentioned on my last podcast, we've now had 2 consecutive quarters of losses in productivity * Despite this bad jobs report, the market shrugged it off * The stock market rallied because bad news is good news - the odds of a Fed rate hike are now the lowest they've ever been * If you look at the Foreign Exchange markets, the dollar was broadly higher today * It was up big against the Australian dollar because the Reserve Bank of Australia lowered their inflation forecast * They lowered it from 2-3% to 1-2% * You would think that's good news, because it means the cost of living will rise only 1-2% * Back in the day, news of low inflation sent a currency higher, because it was not losing purchasing power * The news sent the Australian dollar tumbling because the market now expects the Australian Reserve will have to c... Our Sponsors: * Check out FRE and use my code LISTEN20 for a great deal: https://frepouch.com * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy