The hidden SILVER LINING everyone missed in the jobs report

[00:00:00] Speaker 1: THE JOBS NUMBERS JUST LANDED. IT MIGHT BE WORSE THAN WALL STREET WANTS TO ADMIT, BUT THE SOFT LANDING NARRATIVE, SHATTERING OR COULD MIXED SIGNALS KEEP THE FEDERAL RESERVE ON THE SIDELINES? WELCOME TO THE BIG MONEY SHOW. I'M DAGEN McDOWELL ALONG WITH MY CO-HOST, TAYLOR RIGGS, MARCUS LIMONOS, SHERYL CASSONI AND WITH US FOR THIS HOUR, BARONS INVESTOR CIRCLE NEWSLETTER EDITOR, JOSH SHAFFER. ALL RIGHT. THE U.S. ECONOMY ADDING JUST AROUND 3,000 JOBS IN JUNE, ROUGHLY HALF OF WHAT ECONOMISTS WERE EXPECTING. IT'S THE WEAKEST GAIN IN MONTHS, BUT THE UNEMPLOYMENT RATE FELL 4.2%. THIS ISN'T A COLLAPSE IN THE LABOR MARKET, IT'S ANOTHER PIECE OF EVIDENCE THAT THE ECONOMY ISN'T LOSING MOMENTUM. MAYBE IT'S JUST RIGHT. OIL IS NOW TRADING. LET'S TAKE A LOOK AT IT. WHERE IS IT TRADING? 67 AND CHANGE. CAN WE PUT IT UP? WE'RE TRYING TO GET IT. WE'RE TRYING TO GET IT. WE'RE TRYING TO GET IT. INFLATION, LOOK AT THAT, IS VERY CLOSE TO WHERE IT WAS RIGHT BEFORE THE IRAN CONFLICT STARTED. INFLATION WILL LIKELY BE EASING FOR MONTHS. THE ECONOMY HAS DEFIED EXPECTATIONS AND TODAY'S NUMBERS SUGGESTS THAT THE STREAK, WELL, IS IT OVER? WE'RE GOING TO ASK ALL THESE QUESTIONS. THE FEDERAL RESERVE, WHAT'S IT UP TO? HERE'S WHAT U.S. TRADE REPRESENTATIVE JAMESON GREER HAD TO SAY. I DON'T THINK THEY'RE GOING TO BE HAWKISH WITH THE JOBS NUMBER. I THINK WE'RE GOING TO HAVE A GOOD CPI NUMBER BECAUSE GAS [00:01:27] Speaker 2: PRICES ARE COMING DOWN AGAIN. SO I DON'T THINK WE'RE GOING TO SEE A HIGH. I THINK IT WILL LEAVE A STAY OR MAYBE IT WILL BE MORE NOVISH. WHO KNOWS? TAYLOR RIGGS, I KNOW YOU WERE ALL UP IN THE NUMBER STARTING AT 8:30. [00:01:39] Speaker ?: LOVE IT. [00:01:40] Speaker 1: IT IS JUST NOT THAT BAD. IT MEANS THAT THE FEDERAL RESERVE MAYBE ISN'T GOING TO HIGH INTEREST RATES. WHAT'S THE MARKET? UNCHANGED. UNCHANGED. UNCHANGED. ARE BONDS CATCHING A BID? MAYBE. THAT'S OUR FED TRADE SPEAK. [00:01:59] Speaker 3: BUT WE'LL DO THAT LATER. I THINK YOU NAILED IT. THIS WAS KIND OF LIKE HO HUM. GOOD. SORT OF SOME GOOD AND BAD. THE LABOR MARKET IS STEADY WHEN WE EXAMINE TRENDS LONG-TERM. A YEAR AGO UNEMPLOYMENT WAS 4:1. TODAY IT'S 4:2. THAT'S EXACTLY WHAT THE FED THINKS FOR LONG-TERM. SUSTAINABLE UNEMPLOYMENT RATE. AVERAGE PAYROLL GROWTH IN THE LAST THREE MONTHS WAS 111,000. FASTER THAN ANY REASONABLE ESTIMATE OF GROWTH IN THE LABOR FORCE. SOUNDS GOOD. HOURS WORKED IN THE QUARTER ROSE BY 1.3% AT AN ANNUAL RATE. WHICH IS CONSISTENT WITH THE PRODUCTIVITY TRENDS THAT WE HAVE SEEN. THE PRODUCTIVITY TRENDS TO BE ABLE TO TALK TO THE FED THAT SUPPORTS ABOUT 3% GROWTH. WHICH ALSO IS GOOD. SO I THINK MY TAKE AWAY FROM ALL OF THIS IS THERE'S NO SORT OF REASON FOR THE FED TO MOVE. WE SAW HIKE ODDS GO FROM LIKE IN THE 70s TO THE 50% CHANCE NOW. KEVIN WORSH AGAIN ISN'T GOING TO BE FORECASTING. SO HE'LL PROBABLY STAY PAT. WE HAVE SEEN THOSE HOURS. WE HAVE SEEN THOSE NUMBERS IN JULY AND AUGUST TO CONFIRM ANY TRENDS. FINALLY, YOU KNOW, WE CAN TALK ABOUT THE HOUSEHOLD NUMBER WHICH WAS WILD. THE DROPS THERE. BUT WEEKLY JOBLESS CLAIMS IN THE LAST WEEK OF JUNE WERE ONLY 215,000. THAT IS IN LINE WITH THE AVERAGE IN THE LAST FOUR YEARS. SO FOR ME THE BIG TAKE AWAY HERE WAS STEADY AS SHE GOES. I THINK THAT'S THE HIGHER GROWTH. I THINK YOU HAVE A LOT OF IMMIGRATION TRENDS WITH SOME OF THE -- WHAT AM I TRYING TO SAY? DEPORTATIONS. THANK YOU. YOU KNOW, THIS IS A SHRINKING WORKFORCE. MY CONCERN HERE AND THEN I'LL LEAVE THIS UP TO EVERYONE ELSE. YOU SAW SOME BIG DROPPING OUT IN THE LABOR FORCE IN MEN BETWEEN THE AGES OF 16 AND 20. I DON'T LIKE THAT. THAT'S PRIME AGE. NOW, I DON'T KNOW, IS THAT GRAD SCHOOL? IS THAT POST-COLLEGE TRYING TO FIGURE OUT WHAT WE'RE DOING? BUT I DON'T LIKE TO SEE THOSE NUMBERS LEAVING THE WORKFORCE. [00:04:10] Speaker 4: THE LABOR PARTICIPATION IS ONE THAT I'M REALLY FOCUSED ON. IT DROPED FROM 65 TO 61. AND YOU CAN FOCUS ON IT BEING THE 16 TO 20-YEAR-OLDS. WHICH, BY THE WAY, MAYBE THEY'RE NOT WORKING THE LEMONADE STAND. BECAUSE THEY'RE NOT GOING TO GRAD SCHOOL. BUT I WONDER, ARE THE BABY BOOMERS FINALLY STARTING TO NOT BE PART OF THE LABOR POOL? IS THAT CHANGING SOME THINGS? YES. THOSE FOUR POINTS REALLY MATTER. AND THAT, TO ME, IS THE HIDDEN SILVER LINING IN THE STORY. I'M NOT ALARMED BY THE NUMBERS AT ALL. [00:04:36] Speaker 5: OTHER SILVER LINING IN THE STORY, YOU GOT BROADER JOB GROWTH AGAIN. WE SPENT A LOT OF THE LAST YEAR TALKING ABOUT HOW THE HEALTH CARE SECTOR IS THE ONLY THING THAT'S DRIVING THIS REPORT. YOU'RE GETTING POSITIVE REPORTS. IT'S JUST HEALTH CARE. IT'S JUST HEALTH CARE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. [00:05:08] Speaker 6: YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. YOU'RE GETTING POSITIVE. THAT COULD BE A FUTURE REVISION. YOU DID HAVE REVISIONS DOWNWARD, BOTH FOR APRIL AND FOR MAY. OBVIOUSLY, I BOOKED THE NUMBERS THIS MORNING ON MORNINGS WITH MARIA. AND ONE OF THE THINGS THAT WE [00:05:26] Speaker ?: WERE KIND OF -- [00:05:26] Speaker 6: YEAH, YOU DID. HEY, BABY. EVERY FRIDAY, EVERY MONTH. YEAH, EXACTLY. WE MISS YOU. BUT, YEAH, THAT WAS, I THINK, THE BIGGEST QUESTION MARK. I THINK YOU'RE GOING TO SEE MORE REVISIONS TO THIS JUNE NUMBER. BUT OVERALL, MACRO, HONESTLY, I'M WITH YOU GUYS. THIS NUMBER DID NOT BOTHER ME. THE REPORT DID NOT BOTHER ME. I THINK WE'RE GOING TO GET THE FED MINUTES NEXT WEEK. I THINK WE'LL GET THAT FIRST WINDOW INTO KEVIN WORSH, THE THINKING ABOUT A FUTURE INTEREST RATE HIKE, WHICH, AGAIN, IS MORE OFF THE TABLE TODAY THAN IT WAS EVEN BEFORE THIS REPORT. AND WE KNOW THAT KEVIN WORSH HAS NO INTEREST IN RAISING RATES AT ALL. THE OTHER, YOU KNOW, I THINK, IMPORTANT PIECE OF THE OVERALL STORY WITH REGARDS TO JOBS IS GOING TO BE IN TWO WEEKS, WE'RE GOING TO GET MORE INFLATION DATA. THAT'S GOING TO BE NEGATIVE. ALL OF THAT AND EARNINGS ARE STARTING IN TWO WEEKS. EVERYBODY GET READY. GET READY TO ROLL. IT'S GOING TO BE GREAT. I'M FEELING VERY BORNISH [00:06:18] Speaker 4: RIGHT NOW. I'M GOING TO NEED TO CHALLENGE YOUR INFLATION COMING DOWN NEXT MONTH. AND I'LL TELL YOU WHY. THERE'S JUST A LAG. AND SO WHEN WE GET INTO OIL, WE TALK ABOUT ROCKETS AND [00:06:26] Speaker ?: FEATHERS. [00:06:26] Speaker 4: THINGS GO UP FAST AND THEY FALL VERY SLOWLY. AND THE ISSUE THAT I HAVE IS THAT THE NEXT MONTH'S DATA, WHILE IT'S NOT GOING TO BE GOOD FOR FORWARD-LOOKING DATA, STILL HAS THE MIDDLE OF THE WAR WHEN OIL WAS A LOT HIGHER. AND WE KNOW THAT IT GOES FROM THE BARREL TO THE BOAT, TO THE BASKET, TO THE BALANCE SHEET. ARE WE GOING TO SEE PEOPLE TRYING TO CLEAR THEMSELVES OF PRODUCTS THAT THEY MAY HAVE BOUGHT AT MUCH HIGHER PRICES? AND THERE IS A LAG. [00:06:49] Speaker 6: AND THAT'S WHY THE AMERICAN CONSUMER ISN'T SAYING THEIR GAS PRICE GO DOWN. IT TAKES A LITTLE BIT OF TIME. IT'S BECAUSE THOSE GAS STATIONS BOUGHT IT AT HIGHER PRICES. I MEAN, WE KNOW THAT. IN GENERAL, I DO THINK THE DATA IS GOING TO BE MARKET POSITIVE AND LOOKING MUCH BETTER. WHEN YOU TALK ABOUT THE 55-PLUS EXITING THE WORKFORCE, IS THAT [00:07:06] Speaker 3: A POSITIVE BECAUSE EQUITY MARKETS ARE AT RECORD HIGHS? AND SO YOU FINALLY HAVE A RETIREMENT THAT PEOPLE FEEL LIKE THEY'RE ALLOWED TO TAKE. WE'VE BEEN TALKING ABOUT THIS WEALTH BOOM AND THE YOUNG GENERATION FEELING LIKE THEY CAN'T KEEP UP AND BUY A FIRST HOME. BUT IF YOU START TO SEE THOSE 55s DROP OUT, MAYBE THEY'RE FINALLY COMFORTABLE WITH RECORD HIGHS SAYING, I FEEL GOOD ENOUGH TO LEAVE AND TO WALK AWAY. AND I ACTUALLY VIEW THAT AS A POSITIVE INSTEAD OF A NEGATIVE. [00:07:37] Speaker 4: IS 55 THE NEW NUMBER? [00:07:39] Speaker 3: YOU KNOW, 80% OF NVIDIA EMPLOYEES ARE MILLIONAIRES AND SPACEX IS MINTING MILLIONAIRES EVERY DAY. I MEAN, MAYBE. [00:07:48] Speaker 6: I DON'T KNOW. THEY'RE CASH POOR AND STOCK RICH. I THINK THERE'S AN INTERESTING [00:07:55] Speaker 1: STORY THERE. CHRIS LOWE, THE ECONOMIST, A NOTE ON THE JOB GROWTH THAT WE'VE HAD -- WE STILL HAVE FOUR STRAIGHT MONTHS OF JOB CREATION. YEAH. WHICH YOU USE THE WORD -- THAT'S AN ACCOMPLISHMENT. AND IF YOU LOOK -- SO UNDER THE HOOD, FINANCE UNCHANGED, INFORMATION TECHNOLOGY CONTINUES TO CUT JOBS. BUT THAT GOES BACK AT LEAST THREE YEARS. THAT IS A LONG-RUNNING TREND. SO NOT ANYTHING TO BE UTTERLY CONCERNED ABOUT. AND WE LOOK AT OIL. 67.91 AT THE MOMENT. WE'RE WATCHING NASDAQ STOCKS. AGAIN, THE SELL-OFF CONTINUES. PARTICULARLY WE'RE LOOKING AT SOFTWARE SELLING OFF. 67.26 WAS THE CLOSE BEFORE THE IRAN WAR STARTED. SO THAT -- I KNOW IT'S A MEANINGLESS BENCHMARK. BUT I STILL -- I IMPLY MEANING TO IT. I WANT BELOW 67.26. MAKE IT HAPPEN. SOME THINGS I LIKE TOO. AND I KNOW WE'LL TALK ABOUT [00:08:52] Speaker 3: MARKETS IN THE NEXT HOUR IS COMPANIES LIKE CATERPILLAR. ARE ALMOST UP, WHAT? 80% YEAR-TO-DATE. CORRECT ME IF I'M WRONG. YES, THAT'S TIED TO THE AI TRADE. BUT THAT'S ABOUT A BROADER-BASED CONSTRUCTION MANUFACTURING BOOM. I KNOW WE'VE TALKED ABOUT HOW CONSTRUCTION JOBS, SOME OF THOSE LOOK WEAK IN THE NUMBERS THAT WE GET. BUT THE ADMINISTRATION CONTINUES TO TALK ABOUT THIS MANUFACTURING AND CONSTRUCTION [00:09:21] Speaker ?: BOOM. [00:09:21] Speaker 3: AND IF CATERPILLAR IS ANY SIGN OF THAT, THAT'S SORT OF A SIGN OF BROADENING ECONOMICS. I THINK THERE'S JUST AN INFRASTRUCTURE BUILDING THAT I LIKE TO SEE BESIDES JUST MAG-7 OR AI STOCKS. IT'S A LITTLE BIT BROADER THAN THAT. I KNOW, MARKUS, YOU AND I HAD OUR POP QUIZ A FEW WEEKS AGO ON CATERPILLAR. THEY JUST CONTINUE TO CRUSH IT. [00:09:39] Speaker 4: SO JUST ANOTHER SORT OF SIGN OF BROADENING ECONOMICS. WHAT DO YOU THINK? WHAT DO YOU THINK? [00:09:43] Speaker 5: THAT'S A LITTLE BIT. NO, GO AHEAD. INFRASTRUCTURE. I WAS GOING TO SAY THE OTHER POSITIVE, I THINK IF YOU TIE ALL OF THIS TOGETHER FOR ME FROM A MARKET PERSPECTIVE AND SORT OF THE FED ANGLE, I THINK THERE'S JUST AN INCREASING CHANCE THAT YOU GET A DOVISH KEVIN WARSH AT THE JULY MEETING. YOU START ADDING ALL OF THESE THINGS TOGETHER. AND IF HE WANTS TO ONLY TALK ABOUT DATA THAT HAS ALREADY HAPPENED, YOU'RE LOOKING AT AN REPORT THAT, YES, TO MARKUS'S POINT, MAYBE WON'T BE AS GREAT AS SOME PEOPLE HOPE, BUT IT'S GOING TO BE BETTER THAN MAY. I THINK JUNE CPI IS GOING TO DEFINITIVELY BE BETTER THAN MAY. YOU NOW HAVE A LABOR MARKET THAT IS NOT HEATING UP. THERE IS SLIGHT CONCERN IF YOU GET A HOT REPORT AND YOU'RE ADDING TOO MANY JOBS, WHERE IS THE WAGE GROWTH GOING TO GO? YOU COULD START GOING DOWN THAT PATH. THAT FEELS OFF THE TABLE TOO. KEVIN WARSH, THOUGH, DID [00:10:22] Speaker 6: SAY, WE'RE GOING TO BE LOOKING AT DATA, BUT HE SAID REAL-TIME DATA, AND I THINK THAT'S VERY IMPORTANT BECAUSE THE REAL-TIME DATA HAS BEEN SHIFTING WEEK TO WEEK BECAUSE WE'VE HAD ALL OF THIS BACK AND FORTH BETWEEN IRAN AND THE UNITED STATES AND OF COURSE THE STRAIGHT, ARE SHIPS GOING THROUGH ARE THEY NOT, ET CETERA, ET CETERA. BUT, YOU KNOW, IF YOU LISTEN TO HIS WORDS, AND I AM ACTUALLY LOOKING FORWARD TO THE MINUTES NEXT WEEK, I'M NOT SURE IF I'M ALONE HERE OR NOT, BUT I THINK IT'S GOING TO SEE KIND OF THE DIALOGUE AND THIS NEW FED AND HOW THEY COMMUNICATE AND ALSO, YOU KNOW, WHAT POINTS HE'S TRYING TO USE TO LEAD THEM TO THE, YOU KNOW, TO THE DECISION MAKING, THE DECISION WE GOT LAST WEEK. SO WE'LL SEE. [00:10:59] Speaker 1: YOU'RE LOOKING AT PALANTIER AND OTHER.