Jobs Report: Much Worse Than Expected

[00:02] was released this morning and the results were well, not so good. It came to show you what happened and what this means for us. Okay, so for the month of June, the expectation was that the labor market would add a net 115,000 jobs. The

[00:17] results came in at 57,000. So, of course way below expectations. market has been trending. So, this is the monthly jobs added or lost since And as you can see, I mean you can clearly see the labor market has been

[00:33] And right now, like if you take a look at the past 12 months, yes, we did suffer some major job losses in certain months. You know, certain months have job losses over over 100,000. So, the jobs

[00:48] the results today, like the jobs added, that figure, what we got today for June, plus 57,000. You know, of course it wasn't great. Again, it came in below expectations, but then again, if you look at it, I

[01:00] mean it wasn't terrible. Okay, now with that being said, what is the significance of today's jobs report, the results? were a big deal and I'm going to show you.

[01:12] Okay, so because the results of the jobs report was not good, that means that the labor markets is not thriving, right? mandate, price stability and maximum employment.

[01:25] doing so hot, then that means that the Federal Reserve is less likely to raise you what happened and this is coming straight from the CME FedWatch tool.

[01:37] The next Federal Reserve meeting is going to be on July 29th. 1 week ago, raise interest rates at that meeting was at 32.1%. So, probably a lot of you know, a lot of people watching probably remember that

[01:51] and I said that I would have I would bet against that because 32.1% to me, my opinion was that was just way too high. Now the odds of a rate increase at that Now the odds of a rate increase at that meeting has fallen to 17.6%

[02:04] media is just spinning this out of control that they're saying or they're portraying the image of the Federal Reserve is so hawkish, but I told you that I wasn't buying it. And now the probability that the Federal Reserve

[02:17] keeps interest rates the same at the July meeting have now increased from 67.9% a week ago to 71.1% a week ago to 71.1% yesterday to now 82.4%

[02:30] after this report. And I just want to say that the logic is simple. If the results were great, like the report showed that the labor market was booming then the Federal Reserve can afford to raise interest rates, like

[02:42] they would have wiggle room. But if the labor market's not doing so hot, if the labor market is suffering and they raise interest rates, which hurts the economy and the job markets well, if that's the situation, then they

[02:54] don't have that wiggle room and they don't want to make a bad situation worse. Like you see what I'm saying? And another way that they're interpreting this is if the labor market is booming like we're talking about if employers

[03:07] are hiring like crazy and fighting for employees by giving more attractive offers to everyone like in general then that creates an inflationary pressure. Because if people are getting paid more,

[03:19] then people have more money to spend and people can afford to pay higher prices and that's inflationary, but again, that's not the case. The results came in weak and they're seeing this as the labor market is not a

[03:32] source of inflationary pressure. So there's less of a need to raise markets and that's why the odds of a rate increase for July have fallen so hard overnight. Now in terms of the unemployment rates, it actually

[03:47] unemployment rates, it actually decreased from 4.3% in May to 4.2% in The reason why is because you have to remember that jobs were still added in additionally, they're saying that the labor participation rate actually fell.

[04:02] And as a result, we got the decrease from 4.3% to 4.2%. Okay, now I want to show you the JOLTS reports, which was released 2 days ago by the government. Job openings rose to a 2-year high.

[04:16] important to note that more job openings does not automatically mean more does not automatically mean more hirings. And as you can see here, job openings have recently been trending up, right? However, hirings remain flat or a

[04:31] depends on what time frame that you're looking at. But the takeaway is that even though job openings are increasing, it doesn't mean now I want to show you this to give you

[04:44] situation. So this shows the trend of hiring, people quitting, and layoffs. Recently, as you can see, hirings have flatlined. And it's it's at a slightly lower level compared to previous years. And if we look at the amount of people

[04:59] that are quitting, it remains relatively low. So that signals that workers are not feeling good about the labor market situation. In contrast, I want you to take a look at this.

[05:12] That top line is hiring, right? And employers were hiring like crazy at that boom. And if companies are hiring like crazy, money, then naturally more workers are going to

[05:27] better opportunities, especially when, you know, companies are fighting for But because that's not the case right now, and the labor market is cool with less opportunities, more people are staying put. You know, fewer people are

[05:41] quitting. And this right here is the trend for layoffs. And as you can see, it's been steady for quite some time. So, this is why we continue to see the bunch of nothing, just floating around

[05:53] in the 4% range for the past 2 years. And this is the last report that I want know, I'm just going to show you the highlights. highlights. US-based employers announced 45,849

[06:05] job cuts in June. So, this is down by 4% compared to the same month last year. And the amount of job cuts for the second quarter of 2026 is down by 9% year. Therefore, it's a slight improvement

[06:20] when you're comparing year-over-year. So, as you can see, if you take a look at the monthly chart, 45,000 job cuts in June, that's slightly better than last year. And historically, it's not terrible like the spikes that

[06:33] we saw in 2020 or early 2025. That's when a lot of federal employees got cut. But, of course, it's not amazingly low, like good, like 2021 or 2022. So, I would describe the situation as kind of like the labor market is just

[06:49] hanging in there. It's just hanging on. Okay, now let's take a look at which industries have been cutting the most. In second place is transportation. Job cuts in transportation are 40,970 this year.

[07:02] So, that's actually up by 387% compared to the same period in 2025. understandable because if you think about the last 12 months,

[07:14] just think about what happened. The trade wars, tariffs, rising fuel prices, And then you have in first place, it's technology. Job cuts in technology total 139,156 so far this year.

[07:28] So, that's an increase of 83% compared to the same period last year. Job cuts in tech account for 1/3 of all job cuts this year. And a very good question is what is driving all these job cuts? The number one reason has been

[07:43] artificial intelligence. AI was the reason cited for 101,743 job cuts this year, which is responsible for 23% of all job cuts this year. AI was the reason cited for 31% job cuts

[07:58] Now, I just want to say that I remember when this figure, this stat was 10%, was under 5%, but as I gave my opinion before, AI in the labor market, like I told you, it's going to be no joke. Like it's

[08:12] going to continue to disrupt. So, I understand that, it can't replace many human tasks. Like I get that and I agree with that. like I'll just say, this is my opinion, that many jobs are in jeopardy, like

[08:25] especially if you combine AI with advanced robotics. job cuts is market and economic conditions. Store closings have accounted for 78,570 job cuts this year, and the

[08:40] restructuring cited for 38,755 job cuts. That's your labor market the support, and I wish you a very nice 4th of July. Thank you so much and take 4th of July. Thank you so much and take care.