Stock Talk - Stock Market News, Government BLS Jobs Data: Bullish or just B--LS--t?

Starting point is 00:00:00 The Old Carvis investment team is busy hunkering down for the upcoming fourth quarter earnings reports. So the investment team is super busy here. I'm going to keep this week's video short and sweet, and I'm going to try to help investors and my subscribers regain something more valuable than money. What's that? Your time. Many retail investors I run into want to spend a lot of time with me discussing economic data and forecast. Maybe it's because I manage money for over 30 years, or maybe it's because I've taken econ and finance class or maybe it's because I have a CFA, or even maybe it's because I went to a prestigious Ivy League business school for my MBA.

Starting point is 00:00:38 Or maybe these investors themselves study finance or economics in school. I don't know, but what I do know after doing this job for decades is that relying on, waiting for, or spending too much time discussing and putting weight on the weekly and monthly government data releases outside of an academic discourse

Starting point is 00:00:55 is near a complete waste of your time as an investor. This week's video, government data, and more specifically, Bureau of Labor Statistics, better known as BLS jobs data? Is it bullish or just bull? Well, you know what I was going to say. Last Friday, with much fanfare, the White House, as well as politically biased news media, the Bureau of Labor Statistics or BLS unit of the United States Department of Labor released its much anticipated by some monthly jobs and unemployment data reports.

Starting point is 00:01:23 Here are how a few of the promotional headlines read by the press and the White House. The Hill said, said, U.S. added 216,000 jobs in December blowing past expectations. CNBC, payrolls increased by 216,000 in December, much better than expected. Reuters. The economy cranks out jobs at the brisk-paced in December. The L.A. Times said employers added a surprisingly strong 2016 jobs, a sign of continued economic strength. And the White House, well, they just touted the U.S. economy's strength as election year begins. If you were watching CBC Bloomberg News or most other financial news outlets, you probably got an initial rush of adrenaline listening to some of those stories.

Starting point is 00:02:04 More jobs than expected? That's a good thing, yes? Usually it is, yes. But that premise starts off as being faulty from the get-go. Why? Because the data and the numbers, the BLS releases, even with over 2,000 employees in nearly a billion dollars in annual budget, while fictionally precise are nearly 100% inaccurate and essentially fake. I mean no disrespect to BLS employees. However, the BLS charter funded by taxpayers is to be the principal fact-finding agency for the

Starting point is 00:02:34 U.S. government in the area of labor economics and statistics. Functionally, the BLS collects processes, analyze, and disseminates data to the American public. The problem for investors relying on the data to make any investment decisions is that the data is virtually always inaccurate when it's first released. And we're not talking about a few hundred or a few thousand jobs. talking about tens, if not hundreds of thousands of jobs monthly and annually. Case in point, the month of December, the release stated the economy created 216,000 jobs. Of those jobs, the majority were government employees, education, health care workers, and hospitality and leisure. Those

Starting point is 00:03:12 industries that were hit hardest by COVID and whose sectors have recovered last. The issue is don't believe that number. Why? Because the revision still already slowing economic growth in October and November numbers came out and guess what? Those are the number. bad numbers were revised so much worse than originally thought. Out of the roughly 350,000 jobs the BLS reported that were created a combined October and November period, we lost 70,000 of them, or about 20%. Yes, the BLS numbers of only four to eight weeks ago were revised down by over 20%. Only in economics could someone hand-wave that level of AROA. More precisely, October was revised from 150,000 jobs added to only 105,000 jobs.

Starting point is 00:03:55 In November, from 199,000 to 175. This means that all but one of 2023 job reports have been revised sharply lower over the next one to two months from being reported. Ten out of the past 11 jobs reports have been revised substantially lower. Take a look at the monthly data and revisions compiled by Zero Hedge.

Starting point is 00:04:14 And investors, year-to-date, our taxpayer-funded federally government data gatherers very quietly vaporized, almost 440,000 jobs that were initially reported by the BLS through Thanksgiving. Moreover, according to David Rosenberg throughout 2003, in excess of 40% of BLS payroll growth over 2022, came from the fairy tale birth-death model, the BLS issues to guesstimate its jobs report. Investors, these are the takeaways from the December jobs BLS release and the prior Joltz Jobs Opening release. The takeaway is not the economic strength.

Starting point is 00:04:49 Rather, it's one, the economy is slowing quite rapidly, and two, quit wasting your valuable time, listening to strategists, academic, economists, and worst of all, politicians quoting government economic data series. The economy is not nearly as strong as those in politics and on financial TV are alluding to. In fact, according to the BLS, an economy actually lost minus 33,000 temporary workers in December at the height of the seasonal shopping period. Does that sound like a strong economy to you? It doesn't to me. The first industry I covered as a by-site analyst at a business school was the temporary help and consulting services industry. The first rule of hiring and firing in almost every major corporation in America is hire temps first, consultant second, and full-time

Starting point is 00:05:35 employees, third. And then, in the reverse order, fire attempts first, consultant second, and full-time employees last. Why? Because that's how American businesses keep fixed costs low and economic leverage high when things improve. And when things slow, you can downsize rapidly and economically without destroying your culture or your business. Investors is another point I've discussed over the last two years when pressed by those wanting to discuss government data, and I have to emphasize once again, is the headline number from the BLS does not quantify the quality of each job created. These numbers double and triple count workers holding one or more jobs, temporary jobs,

Starting point is 00:06:12 or poor-time work. In the BLS data land, one AI computer programmer making $500,000 a year at Microsoft or Amazon or Google is worth less to the economy than a struggling to offset inflation worker holding three new part-time jobs. In fact, according to the same zero-hedge data analysts we follow, looking behind Friday's headline numbers, the numbers of full-time jobs actually plunged by 1.5 million in December to the lowest level since February of 2023. At the same time, the number of seasonally held part-time jobs jumped well over 730,000 to the highest on record. The number of the number of number of multiple job holders most likely struggling to offset inflation forces also jump significantly

Starting point is 00:06:56 to a new all-time high. Investors, the bad news. While we are technologically closer to sending humans to Mars, it seems we're no closer to getting both timely and accurate government data. The good news is, hopefully, though, Carvest investment team has helped educate you on why you should spend very little time worried about weekly or monthly government data releases that are hyped on financial news networks, usually as the most important data of the week or likely key to your money today, or this week, or this month. Investors pass on those stories and go read a good Tom Clancy thriller. It's better fiction than most BLS reports and most other government data releases. Our in-house investment team has just released a tool that is structured to help investors and other RAs better navigate through more uncertain times that may require more tactical decisions in one's investments.

Starting point is 00:07:44 If you're interested in learning more about this exciting tool, go to oak harvest funds.com where you can find out more about this new investment strategy. From the team here at Oak Harvest, have a blessed weekend. All content contained with an Oak Harvest podcast expresses the views of the speaker and is for informational purposes only. It is based on information believed to be reliable when created, but any cited data, indicators, statistics, or other sources are not guaranteed. The views and opinions expressed herein,

Starting point is 00:08:14 may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast should be considered as personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment, and your investment results may differ when compared to an index. Specific portfolio actions or strategies discussed

Starting point is 00:08:41 will not apply to all client portfolios. Investing involves the risk of loss and past performance is not indicative of future results.

Stock Talk - Stock Market News, Government BLS Jobs Data: Bullish or just B--LS--t?

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