Jobs Report Surprises Again… No Rate Cuts Now?

[00:01] labor markets. The jobs report came out and it was surprisingly good, like Reserve in a very difficult situation. So, I want to tell you what happens. net jobs were added for the month of March, and I want you to think about

[00:17] that because if the labor market is doing so well, then how can the Federal Reserve justify an interest rate cuts? So, we're going to take a look at the shortly. Okay, here are the number of net jobs

[00:30] added or lost by month. And as you can see, 178,000 jobs added in 1 month is That's better than any month that we had in 2025 and also so far in 2026.

[00:43] to bring to your attention. If we look back 1 month to the previous February, when they released the jobs report, the government said that the labor market lost 92,000 jobs. So, that was the

[00:58] However, it's now been, you know, as expected, revised downward. Now, they're saying that the US labor market didn't lose 92,000 jobs in February, they revised it downward to 133,000 jobs lost.

[01:14] mean, this was expected. So, for this whole 178,000 jobs added in March, important for you to maintain a healthy

[01:26] take a look at the labor market from a high-level overview, I mean, it's clearly a choppy labor markets with every report a surprise now. every report a surprise now. An alleged 178,000 jobs gained in March,

[01:40] An alleged 178,000 jobs gained in March, 133,000 jobs lost in February, 160,000 133,000 jobs lost in February, 160,000 jobs added in January, 140,000 lost in October. I mean, it's all over the place. It's swinging wildly.

[01:53] Now, for March, I just want you to know that it was the jobs number the number of jobs added was boosted by the fact that healthcare workers came back from strike and added approximately 70,000 jobs.

[02:06] So for the healthcare sector, that was responsible for 76,000 jobs added. Construction added 26,000 jobs. Transportation and warehousing added Transportation and warehousing added 21,000 jobs. Federal jobs lost were

[02:20] 18,000. Now, it's very important that you pay close attention to this data Because Okay, the reason why I'm saying that is because the Federal Reserve has repeatedly said that this data point the unemployment rates is the most important

[02:33] for them for making their decisions. For the month of March, the unemployment For the month of March, the unemployment rates has now fallen to 4.3%. That's an improvement from 4.4% in February and 4.6%

[02:46] So from the perspective of the Federal Reserve, if the unemployment rates is rising, then that's incentive for them to cut interest rates to save the labor markets. But because it's not rising,

[03:00] I mean, they have no reason to cut interest rates, at least not a good one. And here I want to show you the wage growth. So this is This is not a pretty picture. For the month of March, wage growth

[03:12] For the month of March, wage growth plummeted to 3.5% from 3.8% in February. So this is not good. I You can clearly see the trend. Wages are growing at a slower pace. And in my previous video, I showed you that money

[03:25] supply is growing at a rate of greater than 10%. And here we are with wages than 10%. And here we are with wages growing at a rate of 3.5%. So this just means more erosion in our purchasing power. Now, I want to show

[03:39] released a few days ago in April covering the month of March. And I found this very interesting as it shows that job cuts in March are up by 25% compared to February. US-based employers announced 60,620

[03:54] job cuts in March. And the leading reason for job cuts is now artificial intelligence, so AI. In March, AI was the leading cause for job cuts at 15,341.

[04:07] job cuts at 15,341. Then came store closings at 13,931, Then came store closings at 13,931, restructurings at 8,726, and market and economic conditions at 6,597.

[04:21] that this is wild. 25% of job cuts were due to AI. In 2023, it was 1% of all job cuts. In 2024, it was responsible for 2%. In 2025, 5%. And here we are in

[04:35] March, AI being the reason for 25% job cuts. before, this is this is just going to become more disruptive for the labor market. Now, I want to show you this, and it's

[04:47] going to be easier for you to just see it for yourself. So, you see how in 2022, there were so many jobs being added each month. Like 200,000 jobs a month was nothing special. Some months were 400,000 jobs

[05:01] special. Some months were 400,000 jobs added, 700,000 jobs, 800,000 jobs. And then, as you can see, it started to really taper off in 2023 and 2024. Each month, jobs added of 100,000 to 200,000 became the new norm, which is,

[05:17] you know, still great. With some months being slightly more or less. And then 2025 and 2026, like in this time frame, we don't even know if we're going to have jobs added

[05:31] or jobs lost for the month. So, clearly, in terms of jobs added, the difficulties. And then, we compare that jobs growth to job openings, and this is what we see. This is data from the JOLTS reports. It

[05:45] covers the past 25 years or so. And our focus is here over the past 4 years. And as you can see, in terms of job openings, it peaked in 2022. And then we see a steady decline in 2023 and 2024.

[06:00] 2025. And we're Of course, we're so early into 2026. But yes, of course, the data is corresponding fewer job openings and slower job growth. All right, now let's

[06:13] take a look at the odds of an interest rate cut after the release of this jobs FedWatch tool. And this is for the upcoming meeting on April 29th. Okay, so a month ago, there was an 11% chance that the Federal Reserve would

[06:28] cut interest rates by a quarter points at this upcoming meeting. Today, the odds of an interest rate cut now stand at 0%. As a matter of fact, it's a 99.5% chance that the Federal Reserve just maintains

[06:42] rates, like they don't do anything. And there's a 0.5% chance that they actually raise interest rates. Okay, so what happens? Why did the odds change so dramatically over the past month? It's because of the rising energy

[06:56] prices, which is expected to increase the rate of inflation, which is not good And because of a really good jobs reports, you know, allegedly, and the falling unemployment rates. So I want you to think about that

[07:09] because if inflation is above targets and increasing, then how can they cut interest rates? Because if they cut interest rates, that's inflationary. And then they would just be adding more fuel to the inflationary fire.

[07:22] suffering, then again, they can't cut interest rates. They would only cut interest rates to rescue a deteriorating labor markets. And well, from what we see, there's no deterioration. Now, let's take a look at

[07:35] the subsequent meeting on June 17th. There's a 97.5% chance that the Federal Reserve just maintains rates here and remains at a Fed funds interest rate of 3.75%.

[07:47] There's a 2% chance that the Federal Reserve cuts interest rates by a quarter And there's a 0.5% chance that the Federal Reserve raises interest rates by And let me show you the next meeting on July 29th. So, funny enough, the

[08:01] meeting. 97.5% chance that they keep rates the same, 2% chance that they cut interest rates, and a 0.5% chance that they raise interest rates. And this is the last meeting that I want

[08:16] This is the meeting on September 16th. So, this is more than 6 months out. And it's a 92.2% chance that the rates are the same by then. A 1.9% chance that

[08:28] they cut interest rates by a quarter point by that meeting. And a 5.9% chance that they actually raise interest rates by a quarter points by then. But, as you can see, the overwhelming

[08:40] expectation is that we're not going to see an interest rate cut for a while. Okay, here's where it gets really tricky Reserve. President Trump has nominated Kevin

[08:53] Warsh to be the next Fed chair. If approved by the Senate, then Kevin chair in mid-May. And as you know, President Trump demands lower interest rates. And I suspect, along with many other people, that Trump

[09:09] only considered candidates that would lower interest rates. interest rates in this environment with a rising rate of inflation and a labor market that does not need rescuing? So,

[09:23] ultimately, what I'm trying to say is like, do you see the problem here? President Trump put in the new Fed chair to cut interest rates, but how can he to be a very interesting dialogue between

[09:36] them. Like, let's see what happens. And if Warsh doesn't cut interest rates probably at the first meeting, then you know that President Trump's going to be so upset. Anyways, the Senate Banking Committee's

[09:48] going to hold their nomination hearing for Kevin Warsh on April 16th. So, you ask me for my opinion, I'll tell you this. I mean, you saw the data. You see looking for a job, like you're in between jobs, then you see it for

[10:02] yourself first hand. But now with rising energy prices, and destruction, I expect the economy and also for the labor market just to expectation. I mean, you can let me know yours.

[10:17] Thank you so much. Please subscribe, and I wish you a very nice day. Take care.