The Latest Jobs Report Is Not as Good as It Seems

[Inside Wall Street with Nomi Prins]( Welcome to Inside Wall Street with Nomi Prins! It’s the only daily newsletter featuring the insights of renowned author and former Wall Street insider, Nomi Prins. Every day, Nomi shines a light on a massive wealth transfer she calls The Great Distortion. That’s the true cause of the permanent disconnect she sees between the markets and the real economy. And she shares ways you can come out ahead, if you know where the money is flowing. You’ll find all Nomi’s Inside Wall Street issues [here](. If you have questions or comments, send Nomi a note anytime [here]( or at feedback@rogueeconomics.com. The Latest Jobs Report Is Not as Good as It Seems By Nomi Prins, Editor, Inside Wall Street with Nomi Prins There’s been some good news from Main Street recently… most notably, the latest jobs report. The U.S. economy added 517,000 jobs in January, taking the unemployment rate to 3.4% – its lowest level since 1969. This is over two times the 223,000 jobs added in last month’s jobs report. It also knocked analysts’ 187,000 estimate out of the park… The jobs report painted a picture of an outstandingly (and surprisingly) strong labor market… But don’t get too excited yet. Employment figures are seasonally adjusted, meaning that officials remove the influences of seasonal patterns from the data. When you examine the real numbers, it’s a whole different story. So today, I’m going to look beyond the headlines. And I’ll show you what the current job market means for interest rates and for your money. Recommended Link [Market Wizard Larry Benedict revealing his best-kept secret for just $19]( [image]( Market Wizard Larry Benedict went 20 years on Wall Street without a single losing year… He delivered 23% returns in 2008 (while the market plummeted 37%)… And last year, he showed his readers how to make money nearly every week. For a limited time, he’s revealing his best-kept secret for just $19. This is the best deal he’s ever offered for his research service… and it could disappear at any time. Plus, he’s even offering a 10-second “over the shoulder” demo of his strategy in action. [Watch it here…]( -- Job Growth Is an Illusion The seasonally adjusted jobs number for January came in at 517,000 new jobs. But the non-seasonally adjusted number shows that employment actually fell by about 2.5 million jobs. In other words, all that job growth is simply an illusion created by seasonal adjustment. [Chart] Now, the fact that jobs went down in January isn’t that shocking. In fact, month-to-month January employment typically falls by two to three million jobs when not seasonally adjusted. It makes sense when you consider that a lot of workers lose their jobs at the end of the holiday season – with people scaling back on retail, leisure, and hospitality. That’s precisely why the government makes those adjustments… to smooth out seasonal bumps in the data (allowing for month-to-month comparison). [Featured: Must See! Florida Dad “hacks” gas pump. What happens next will STUN you…]( Again, just to reiterate, the seasonally adjusted jobs number for January was 517,000. But the non-seasonally adjusted number was negative 2.5 million! To say this makes the “lowest unemployment level since 1969” misleading would be an understatement. The Bureau of Labor Statistics (BLS) even admitted to it in the jobs report: Revisions (due to both the NAICS 2022 conversion and the benchmark process) affected more historical data than typical in the annual benchmark process. In the end, any seasonal adjustment is just an estimate. And we don’t know if it will prove to be “correct.” But here’s the problem. Our economy is in a volatile, transitional period due to the Fed’s tightening monetary policy… And the government is still relying on the same January-seasonal adjustment used in better economic conditions. That means government officials are fiddling with employment data and removing seasonal patterns based on a more bullish economic state. Which, of course, doesn’t work for the current state of the markets. The latest employment data ignored the recent mass layoffs. But those 2023 layoffs were not just due to the holidays… nor did they follow a normal pattern. In January, there were mass layoffs almost every day. What’s more, there have been more tech layoffs in the last few months than the entirety of the 2020 pandemic. Roughly 100,000 people lost their jobs in January. And those layoffs were largely in high-paying tech jobs… while most of the new employment reported was in low-paying services like bars and restaurants. So if the latest jobs report sounds too good to be true, it’s because it is. But there’s more behind these unemployment figures. So let’s dig a little deeper… Recommended Link [Nomi: “Sticker shock here to stay – here’s why”]( [image]( If you’ve been to the store recently, you know… Prices are soaring. Everything from gas, to meat, eggs – even coffee and beer – is stretching American households to their limit. Paired with record home prices, we’re seeing a ‘new abnormal’ most Americans are completely unprepared to withstand. Why are prices rising? And what does that mean for your money? According to the mainstream media, prices are rising as a result of supply chain problems and a war overseas. But according to renowned economist, Nomi Prins, the truth is stranger than that. Her research shows it’s all tied to a phenomenon that began in the 1970s. In fact, she says it can all be explained in a single chart. [Click here to see Nomi’s explanation and the chart she found that reveals the truth about America’s economy.]( -- Layoffs Are Rising While Wages Lag Behind It might sound like common sense, but the more people who are unemployed, the less spending power people have. That leads to less economic activity. Which means less revenue for companies to support higher wages… and more layoffs. Put another way, unemployment begets unemployment. In addition to rising unemployment, wages in the U.S. still lag behind consumer spending. Average hourly earnings in January were up 4.35% year-over-year. Meanwhile, Consumer Price Index (CPI) inflation in January was 6.4%. That means real wage growth fell by 2.1%. Put differently, inflation continues to rise faster than wages. [Chart] The media won’t tell you about these figures, though, as it continues to tout the “robust” job figures. This brings us to the bottom line… Recommended Link [Pentagon consultant: How Joe Biden Could Gain Huge New Powers]( [image]( Forensic accountant who consults for U.S. Pentagon, FBI, and Marines says a scenario is now quietly unfolding that could make many Americans considerably wealthier – but it would also give Joe Biden HUGE new powers to expand the government, and move America in a more Socialist direction than ever. [Full story here.]( -- What This Means for Your Money If you look past the headlines and dig into the details, the labor market isn't as hot as it appears to be. So it’s likely we’ll see a less restrictive monetary policy from the Fed down the line. That’s because the Fed doesn’t want to cause a full-blown economic slowdown as a result of continued rate hikes. You see, rising unemployment, along with falling wages and high inflation, can lead to a recession. This results in poor earnings for companies… and a weaker stock market. As I’ve been telling you, the Fed must navigate inflation. But it also doesn’t want to upset the markets. Remember, in 1977, Congress gave the Fed a dual mandate: to ensure full employment and price stability. But the Fed also has a third, hidden mandate: to protect the markets. That’s the reason the Fed has started ramping down its self-inflicted “war on inflation.” [Featured: Strange Force Coming for American’s Savings? (Prepare Now)]( Now, I’ve been talking about the three stages of the Federal Reserve’s pivot to a neutral monetary policy since [August](. The first stage of the Fed pivot involves a reduction in the size of rate hikes. For instance, Stage 1 began on December 14, when the Fed increased rates by 50 basis points after four consecutive 75-basis point hikes. And at the Federal Open Market Committee (FOMC) meeting in February, the Fed raised interest rates by 25 basis points, confirming we are in Stage 1. But even if the Fed raises rates by 0.50% instead of 0.25% in its next meeting on March 21-22, we'll still be in Stage 1 of the pivot. As [I mentioned last week]( Stage 1 is a great time to invest in real assets like metals, energy, and, of course, infrastructure. That’s because a reduction in the size of rate hikes should ease fears of a global economic slowdown. When that happens, more money will pour into infrastructure, benefitting industrial and real asset companies. With this in mind, consider an infrastructure-oriented exchange-traded fund (ETF) as a portfolio staple for the first stage of the Fed’s pivot. The Global X U.S. Infrastructure Development ETF (PAVE) is a great option. It’s made up of 100 names that could benefit from Stage 1. Most of PAVE’s holdings are in industrials and basic materials. That includes Deere & Company and freight-hauling giant Union Pacific (the second-largest railroad in the U.S.). The ETF also holds utilities, technology, and oil and gas names. Regards, [signature] Nomi Prins Editor, Inside Wall Street with Nomi Prins --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=Inside Wall Street Feedback). --------------------------------------------------------------- MAILBAG Yesterday, Frank wrote in to express his thoughts about the Fed’s interest rate policy and the government’s corruption… I do believe that the rising rates will eventually neutralize, but the corruption in the government will never be brought under control. No matter what area we are talking about. Be it investments or control. Thanks for all you do. – Frank G. After reading today’s piece, do you agree with Frank that interest rate hikes will eventually pause? What are your opinions on the Fed’s battle against inflation? Write us at feedback@rogueeconomics.com. 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