The BLS Is Flying a False Flag

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Transcript:

[00:00:04] Doug McIntyre: Lee, the BLS just announced the unemployment numbers for April, as they always do. The first Friday of the following month, 177 added jobs, unemployment stays at 4.2%.

[00:00:19] Lee Jackson: Yeah.

[00:00:19] Doug McIntyre: Now I was a little surprised it may be that some of the layoffs from the government didn’t hit that. My memory is, is that when you look at unemployment, it tends to be weighted the data collection towards the front of the month.

[00:00:34] Lee Jackson: It is, in which case it’s

[00:00:35] Doug McIntyre: to me it’s a little bit of a false flag. What do you think?

[00:00:39] Lee Jackson: Well, yeah, and maybe they haven’t come into it. I’m sure you saw in, in the last week or so, Intel, 20% of the workforce getting laid off UPS 23% of the workforce being laid off because they’re kind of opting out of their Amazon (NASDAQ: AMZN) delivery, which is such a low margin item that they said, we don’t need this.

[00:01:02] Lee Jackson: So yeah, it, it, they may have, been able to shake it out this month, but boy, next month could be a total disaster.

[00:01:13] Doug McIntyre: Yeah. I mean, I’ve noticed, usually when you start to see guidance disappear, layoffs are the next thing. It’s like, okay, you drop guidance and within two or three months, which you figure out as a board of directors is, is well, we should have [00:01:30] guided lower instead of no guidance.

[00:01:31] Doug McIntyre: So,

[00:01:32] Lee Jackson: yeah, I I, and the thing is, they’re all faced with this now because. The, the tariffs really didn’t start until April 2nd, first quarter. Numbers were already in the can already. And I, I just think that, that it ultimately, it may get solved by the end of the second quarter, but I think there’s a lot of trailing layoffs.

[00:01:53] Lee Jackson: They’re gonna come in and, for four years, really the numbers were bogus. ’cause all it was was government hiring and government spending. And now that that’s going away, it’s gonna, at, at one point or another, it’s gonna have a big effect. I would think.

[00:02:09] Doug McIntyre: Well, I’m gonna try to think back around three years and say that on average the economy added 175,000 jobs in other, if you just sort of go back and average ’em all together.

[00:02:20] Doug McIntyre: Yeah. Unemployment was down in the, mid threes. Now it’s four two. A lot of that has to do with stuff like workforce participation. And there’s, I don’t think that 4.2 in and of itself, up to three six is a big deal. But I mean, if you said to me that the economy could shed 2 million jobs between now and the end of the year based on tariffs, inflation, guidance, that I think the CEOs, I think know they’ve decided to guide neutral.

[00:02:56] Doug McIntyre: Like, I don’t know. But if you’re at, [00:03:00] general Motors and you’re Mary Berra and you say, we’re pulling our guidance, the answer to that is, is that if their tariffs are on our automobiles and we are charging $6,000 more per car, we’re not gonna stay fully staffed based on where we are right now.

[00:03:15] Lee Jackson:  No, hardly no.

[00:03:17] Lee Jackson: And I, I think it’s, it is almost we’re, we’re getting close to the end of a cycle, not the beginning. And so, near the end of that, that is when you do see layoffs and you do see. But I mean, Intel and UPS have nothing to do with tariffs. Nothing. it’s all based on Intel is just a, fraction of a shell of what it used to be.

[00:03:37] Lee Jackson: And UPS just doesn’t make as much money with that low margin Amazon business. It’s hardcore business decisions.

[00:03:45] Doug McIntyre: Yeah. So I see corporate margins coming down just in, across industries. I see, layoffs that, could get into the six figures per month. And then to me, you look at the economy and say, what else is going on?

[00:04:02] Doug McIntyre: Because of the way the Fed looks at the economy now, mortgage rates are still at very close to 7%. Yeah. So you’re, you’re not looking at a lot of movement in the housing market. You’re gonna look at higher prices on cars, but you know, a car loan is six or 7% right now. So there are these colliding movements of things that are bad for the economy.

[00:04:24] Doug McIntyre: Look, everybody, all the economists tariffs are attacks. Yes, tariffs are [00:04:30] everybody please repeat after me. Tariffs are attacks ostensibly.

[00:04:37] Doug McIntyre: Last thing I saw from an economist, which was yesterday in the Wall Street Journal, typical family could add $3,800 to its expenses based on the, the tariff math it is today.

[00:04:50] Doug McIntyre: That is, you probably have to earn $6,000 to pay $3,800, to you take that knockout taxes on a gross,

[00:05:03] Lee Jackson: on a gross level. Yeah.

[00:05:05] Doug McIntyre: Yeah. Median household income in the United States right now is less than 80,000 by a fraction. So do the math. You’ve got an $80,000 household, you’ve gotta find an extra six K.

[00:05:20] Doug McIntyre: You’re probably living paycheck to paycheck. Yeah, maybe a lot better. Yeah. Now you’re gonna throw this on top of people, and to me the next word is the big D defaults. you’re already starting to see default levels on credit card cards moving up. To me,

[00:05:36] Lee Jackson: credit cards are maxed out. car payments are becoming more and more delinquent.

[00:05:43] Lee Jackson: I mean, it is adding up. I have a very good friend who you’re probably familiar with her name is Danielle DeMartino Booth. Are you familiar with her? Yeah. And I’ve known Danielle for 25 years, when I met her, when she was a columnist for the Dallas Morning News. And she’s [00:06:00] one person that if you go through her data, she is very, very bearish on the near term future.

[00:06:07] Lee Jackson: we can work through it, but she says most of the, and she was at the Fed for like 10 years in Dallas and she knows that a lot of this is just smoke and mirrors.

[00:06:17] Doug McIntyre: The other thing that I don’t like, and I’m, I’m looking through the numbers right now. I don’t like the number of people who are, what they call long-term unemployed.

[00:06:28] Doug McIntyre: the people who’ve been looking for jobs for over 27 weeks, that number is high. It went up by 179,000. That’s, to me, the number of people who are looking for jobs, they’re currently part-time, they’d like full-time jobs. That’s over a hundred thousand. Inside these, if you don’t read all the fine print, like wages, long term unemployed, part term, looking for full term, you don’t get a full picture of this.

[00:07:01] Doug McIntyre: This is not a classic 4.2 add on, 1 77. I agree. This is footnote, footnote, footnote, footnote. And.

[00:07:13] Doug McIntyre: I’m looking at 6% unemployment before the end of the year. Oh, my number is 6%. if nothing happens with tariffs, if there’s no solid negotiations between now and [00:07:30] mid-year, my number’s higher than that. My numbers,

[00:07:34] Lee Jackson: my number. Let’s, let’s do this. Why don’t we circle back in about a month when the may numbers come out in early June?

[00:07:42] Lee Jackson: ’cause we’ll be, on he precipice of finishing up the, the quarter and the half and see if it skews up in early June.

[00:07:51] Doug McIntyre: Yeah. So, I mean, so my, my final takeaway of this segment is higher unemployment,

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