Jobs Report Just Forced The Fed to Wait

[00:02] highlights. And today's video is going to be a shorter video because this information is going to be included in the upcoming videos that I have planned Okay, so when looking at the reports, if you take a look at the report at face

[00:14] value, then it's a solid report. 115,000 jobs added for the month of April. So this beat expectations of 55,000. Now, I want to show you this chart so that you have some context and you can

[00:28] compare. So as you can see for the past about 16 months, it's been choppy the amount of jobs added per month. Certain months will add 180,000 jobs and then another month will lose 150,000 jobs.

[00:42] And as you can see, the numbers are way down compared to 2022, 23, and 24. Now, I want to show you the unemployment rate. And this is the most important they're taking a look at the labor markets.

[00:57] So the rate of unemployment remains unchanged at a 4.3%. In their latest projections, they expect that the unemployment rate is going to that the unemployment rate is going to end the year at 4.4%.

[01:09] So where we are right now at 4.3% is still within good standing according to their expectations. So in other words, we are not at a like a freak out moment where the Federal Reserve needs to make an emergency or a critical decision.

[01:24] Essentially, they can just sit back and relax for now if it's at 4.3%. Now, I want you to take a look at the average growth in wages. And as you can see, wages are growing at a rate of 3.6%. In my opinion, this is actually

[01:38] not good because it means that wage growth is not keeping up with the rate of inflation and Americans continue to lose purchasing power. So if you take a look at the M2 money

[01:50] you're going to see that it's been expanding at a rate of of 5% for the past year. So, I've marked off 5% on the chart and the difference between 5% and the wage growth is how much purchasing power that

[02:06] the average American has lost over the past year or so. Okay, now I want to changed the odds of an interest rate cut at the upcoming Federal Reserve meeting. FedWatch tool. The next Federal Reserve meeting's going

[02:20] to take place on June 17th. And before today's report, there was a 4.7% chance that they would cut interest rates at that meeting in June. After the jobs report, the odds of a rate cut in June have increased from

[02:34] rate cut in June have increased from 4.7% to 6.1%. So, yes, it went up. However, there's still a 93.9% chance that the Federal Reserve's not going to cut interest rates in June. And now I want to show

[02:48] you the odds for the July meeting. Before the jobs report was released today, there was an 8.8% chance that interest rates would be lower by the July meeting. Now, after the jobs report was released,

[03:00] the odds of a rate cut have increased from 8.8% to 12.1%. So, although the odds of a rate cut have increased for June and July, the odds are still highly in favor of no change to the interest rate. Anyways, I want

[03:15] you to understand the situation. The situation is that the jobs report was not a disaster. Therefore, well, just think about it. If it wasn't a disaster, then the labor markets does not need any rescuing,

[03:28] Therefore, it makes no sense for the Federal Reserve to cut interest rates. probabilities remain high that they're not going to remain high that they're not going to cut interest rates in June or July.

[03:41] status update on the labor markets. Please subscribe. I'll keep you updated very happy Friday. Thank you, and take care.