Labor Market Concerns: The podcast highlights the recent BLS benchmark revisions, revealing a significant overstatement of job numbers by nearly a million, questioning the previously perceived strength of the labor market.
Historical Comparison: The current job revisions are noted as worse than those during the 2008 Global Financial Crisis, indicating potential underlying economic weaknesses.
Yield Curve Insights: Discussion on the yield curve inversion suggests a high probability of an economic slowdown or recession, challenging the narrative of a strong economy.
Sector-Specific Revisions: Significant job number revisions were observed in leisure, hospitality, and professional services, contradicting earlier reports of growth in these sectors.
Political and Methodological Critique: The podcast criticizes the BLS for methodological flaws and suggests that job data overstatements are not politically motivated but due to incompetence.
Market Implications: With PE ratios at high levels, the market is seen as vulnerable to downturns if a recession occurs, contrasting with past periods of lower PE ratios during recessions.
Investment Strategy: The discussion advises caution for buy-and-hold investors, noting Warren Buffett's significant cash reserves as a signal of market caution.
Investment Community Offer: The podcast promotes an investment community aimed at helping retail investors navigate the current volatile economic environment.
Transcript
Hello fellow robo capitalists. Hope you are well. I can tell you what's not doing well right now. That would be the labor market. In fact, the data we got today was the worst data in history. Now, let me say that again. The data we got today was the worst data in history in regards to the revisions from the non-farm payroll. Worse than the GFC. Absolutely true. Let me adjust my the volume off a little bit there. Sorry for those of you just got your eardrums blasted. But let's get into the important stuff here, guys. The BLS did their benchmark revisions. their first round of benchmark revisions. And let's go over the details. Let's see. First and foremost, let's go to the BLS. Just go straight to the source. And then we're going to go over and get into the nuance over on Zero Hedge. And then we're going to connect some dots and go back to I don't know something called the yield curve. Have you guys ever heard me talk about that? I'm going to I'm going to pat myself on the back a little bit throughout this video. Hopefully you guys can appreciate that. Here we go. Who? Not. There we go. Right here. Out today. So, we have way to share your screen. Ah, right. That'll just build anticipation. It'll build the tension. Right Josh? Here we go. So, from the BLS today, drum roll please, we had a revision of a mere 9001,000 jobs. Basically, a million jobs just Oh, oh, oh, look, there's a squirrel. Remember what what happened to strong and resilient? Yeah, the labor market and the economy, it's very strong and resilient. So long as you're overstating the jobs numbers by oh, I don't know, a million. And and remember this isn't the revisions or this is a different set of revisions, a different time frame from the revisions we got last year. Remember that the 818,000. So last year's revisions 818,000 as far as the first round of the benchmark revisions. This year it's 911. And by the way that doesn't include what we've seen for 2025, April, May, June, July. And I'd like to remind you that even before these benchmark revisions, the June number was down downwardly revised to a negative number 13,000. And when you include these revisions and go back and look at what happened in 2024, there's a very high probability that at least a couple of months in 2024, the non-farm payrolls should have been negative. So think about the narrative that we have had for the last year and a half. What was it? The economy is booming. The economy is strong and resilient. The labor market is on fire. We have way way way way too many jobs and not enough workers. The labor market's very tight as they say. And then everyone is looking at the interest rates and the yield curve saying I I don't know. And then for all the you rebel capitalists out there that just use good oldfashioned common sense, you're driving down the street and seeing homeless camps or you're going into your local Walmart and seeing the cuticle scissors that are behind, you know, steel bars locked up. You can't even get a can of shaving cream for heaven's sakes. And you're like, I don't know. the economy is booming and we have to lock up a a you know we have to lock up the the shaving cream. That doesn't make any sense. And for those of you who are paying more attention, all you have to do is just look at a yield curve and twos and tens go back in history and say, "Yeah, I don't know. Every single time we have this yield curve inversion thingy, we have a recession, if not at the very least an economic slowdown." So, the probability that we would have an economic slowdown or would not have one, the probability that it's different this time, eh, I don't know. Pretty low, right? We'll get back into that in just a moment. So, now let's go over to Zero Hedge. And here we go. Worst revision in history. In fact, how bad was it? Before we get into this, let's give you some context here to show you that it absolutely was worse than the revisions for 2008 GFC. Check this out. So, here are the largest downward US payroll benchmark revisions since 2005, which would be the largest ones because of the population and the size of the workforce um based on BLS data. So today we get negative911,000. 2009 we had for the the uh 2024 period into 2000 excuse me from the 2008 into 2009 period the basically the the the the really really the the worst part of the GFC it was92,000 and oh by the way when everyone was telling us that it's a just wildly strong economy back in 2024 that was downwardly revised to 598,000. Now, it was 818, but the last round that I think came out in January of the benchmark revisions took it from 818 down to 598. So, this 911 is preliminary, right? But based on the way things are going, it might just when we go to the next round in uh January, February for the final benchmark revisions. I mean, I don't see why it wouldn't go higher than than a million. So that's just to give you some context. And by the look at this, so it's not just the GFC. It's not just 2024. Look at the other time frames here. I I mean these are the 10th the 10 most extreme going back to 2005 and coming in at number 10 was minus6,000 that was the 10th most extreme in the last what 20 years so I guess that's just half so let's just go to the fifth so that would have been 2023 and the fifth worst revisions that we had over the last call it 20 years was negative 187,000 negative 187,000 and today we had a negative 900 11,000 I mean strong and resilient sure enough yes forget about those steel bars locking up everything at Walmart that that that doesn't mean anything that that's just um yeah that just that just means that uh crime Crime is on the rise for some reason. Has nothing to do with the economy, though. The economy is booming, running on all eight cylinders. All right. Now, let's get into Zero Hedge. And I get it. That has a lot to do with policing and defund the police and all that, but even outside of the defund police thing. Um, and even a lot of the conservative areas in conservative states that I've been to, they're still locking up everything at Walmart. So, anyway, getting back to it here. So, two weeks ago before both Bloomberg and Reuters, we told subscribers, "Brace for another huge negative payroll revision." I mean, good on them. Good on Zero Hedge, but I mean, again, all we had to do is just look at the yield curve. And and by the way, how many people in the comments in the in the chat on social media when we bring this up told you or told me that, "Oh, this time it's different, George. This time it's different." What you don't understand is fill in the blank. What you don't understand is there's no issuance at the long end of the curve. And that's why it's inverted. And if we just had more issuance, then the curve would be upwardly sloping like we would have in a booming economy. And then you just give it a little critical thought like I don't know because the longing of the curve is all about growth and inflation. It's not really about supply of treasuries because the the banks are going to increase demand if there's an increase of supply that deviates that 10-year yield, let's just say using as an example, from growth in inflation expectations. In other words, nominal GDP expectations, right? So, we talk about that all a lot on this channel, so I won't dive into that. But the main point here is just people were just like they do every single time. They just brush it aside, brush it aside, brush it aside. And then same thing with the psalm rule. Brush it. Oh, that doesn't matter anymore because it's all about immigration. Oh, the psalm rule is irrelevant because we've had all of these uh immigrants come in. I was listening to a podcast yesterday where they were talking about how this 22,000 number that we got last month or just last week for the non-farm payroll and the negative revision, it wasn't that big of a deal because this is all just immigrants uh or you know illegals or whatever leaving the United States and it doesn't matter because it's not going to impact the unemployment rate because we have you know this many jobs and we have this many workers, but if this many workers leaves, then all of a sudden we're in an equilibrium where even if we have fewer jobs, then it doesn't even matter. I I can't get my head around that argument because although it is true, if you have massive amounts of people leaving the workforce or the labor force, it is not going to impact the decline in jobs, won't impact the unemployment rate or it will impact it to a lesser degree. For sure, for sure. for sure. But does that mean that it doesn't impact the economy? I mean, come on. This Let's do a thought experiment. If we had a 100 million people leave the workforce tomorrow, let's just say they all move to Mexico or something like that. 100 million people, right? So, we have 100 million fewer people working in the United States. But let's say the amount of jobs goes down by 100 million. So, the unemployment rate stays at 4.3. What would you say would happen to the economy? Would it just would would nominal GDP just stay right at 30 trillion or whatever it is today? Of course not. GDP would plummet would absolutely drop off a cliff. So it it I mean yeah we can look at the unemployment rate but is it really about the unemployment rate or is it about how many people are actually working in the United States producing goods and services being paid and then spending that money back into the economy therefore aggregate demand. And if you just just because we're at an equilibrium if that equilibrium is way down here as opposed to up here you ain't going to have a good economy. You're going to have an economic contraction. But anyway, getting back to it here. Now, what I thought was interesting is the biggest revisions were in leisure, hospitality, and professional and business services. This was something that every single month I would see the non-farm payroll, and they just have blowout numbers in leisure and hospitality and in business services. I just it's a headscratcher. It's just like, what? Like, okay, I mean, I I get it. people are traveling a lot but in the last year and a half and then you juxtapose that to what the airlines are telling you and remember just a few months ago the airlines were coming out and saying look I don't know what you want to call this economy but for us it's a recession we have seen that level of demand destruction for domestic travel to where th this is the exact for us the airlines it's no different than what we would expect to during a recession. So, while the airlines are telling us that, you've got these leisure and hospitality job numbers just going up and up and up and up and up. You're like, "Okay, something doesn't make sense here." And sure enough, when you actually reconcile and get real numbers, it was because the job numbers were ridiculous. The job numbers were wildly overstated. And I don't think it was a political thing because the jobs going back to this were wildly overstated in 2019 and if I'm not mistaken Trump was the president then uh they wildly overstated in 2024 Biden wildly overstated in 2025 which includes uh most of Biden but part of Trump but I guarantee you they're going to be wildly overstated for the rest of 2025 which would be all about Trump. So, it's it's it's not necessarily political. It's really all about their methodology being horrific and then just a lack of competence. A lack of competence to actually acknowledge the fact that your methods suck and have the ambition or the work ethic, the wherewithal to just go out there and say, "Hey, listen. We need a change." and and and me as the head of the BLS, I'm going to institute that change because that's my job. That's my job to give the best numbers possible to the American people. Anyway, let's get back to Zero Hedge here. So in accordance with usual practice, the final benchmark revision will be issued on February or in February 2026 with a publication January 2026 employment situation news release. So by the way, that's why we go from 118. I know I'm bouncing around here a lot, but that's why we go from the 118 down to the negative 598 is because the first revision that we got last September was the 818 and then they revised that for the final time and and it turned out to be a negative 598. That's I just want to make sure everyone's on the same page there. Okay, getting back to zero hedge annual benchmark revisions to non-farm payrolls. Yeah, and this is just another way to visualize exactly what we were saying. Biggest negative payroll revisions on record. And here you go. 2009 basically GFC and in fact 2024 was at least the preliminary was almost as bad as the GFC and then 2025 as of right now it's even worse. I don't know how you could argue right now that the economy has been strong. Like I I I'm sure I'd be able to argue that if you said, "George, we're putting you in a debate against someone who's very bearish or believes the economy has been extremely weak and you have to take the position that the economy has been strong and resilient and will remain strong and resil." I'm sure I could come up with an argument, but I don't know what it would be right now. It would be pretty tough. It would be pretty tough. monthly payroll growth. You're going to see the same thing here. Uh this is by sector. Okay. Okay. This is from Bent. So, how is he going to spin this? I think you know what he's going to do here. So pushed back last week when I warned that the BLS jobs data would show massive downward revision. Okay. Again, Scott, I don't know if you're if you're if you're that uh what would the word be? Um if you're that much of a visionary because all you had to do is just look at the yield curve. I I mean even right now you've got the 10-year Treasury trading at 4.08 and you got Fed funds at 4.3. that that in and of itself tells you everything you need to know about the the strength of the US economy. He says, "Now it's official. 2024 job gains were exaggerated by nearly 1 million workers." But you notice how he leaves out 2025. I wonder why he's doing that. And this is the top of an already reported uh 578 uh 577,000 in downward revisions. This brings to Biden. You see, he'll just keep talking about the Biden, Biden, Biden, Biden. And what he won't mention is that we're seeing the exact same phenomenon with Trump and we'll likely see it throughout the rest of 2025. I don't know why it would change. I guess maybe because the Trump yes man is going to be put in place, and he's highly incentivized to really, you know, juice the numbers and not just the headline number, but also the revisions. So that will be really interesting when he takes over. We've just got the numbers going, you know, in a trend straight like this. And when he takes over, if you just see it go whoop right back up, you're going to be like, "Ah, okay. I see what's going on here. I see what's going on." Here's JD Vance. It's difficult to overstate how useless BLS data had become. A change was necessary. tone. Oh, to I guess that's a typo. Uh to restore confidence. Uh I don't know if that's going to restore confidence, JD. Um not restoring confidence in me. Um because although the numbers were useless, at least we had a pattern. At least we would know that the headline number was going to be this. and the pattern was downwardly revise, downwardly revise, downwardly revise. That's something that was consistent. So, you could kind of bake that into your analysis. But now, I I would say there's more uncertainty because the new yes man that is going to be u beholden to Donald Trump is going to have this burden on their shoulders that what do I do? Um, well, if I want to keep my job, the numbers better look good, even if they are or if they're not. And I'm not saying that he's going to lie or that he's going to juice the numbers. I'm just saying that he is highly highly highly incentivized to. And by the way, I don't see JD talking about the Well, I guess he is. He's trying to deflect the fact that the new non-farm payrolls are horrible and the revisions in June down to negative and that the trend is horrible even for 2025. I guess he's trying to deflect that by saying that the BLS sucks and they're incompetent and their methodology is bad. not really kind of dodging the fact that yes, they are bad, but they were bad because they overstate the numbers, which is just as applicable to your guy as it is to Biden. So, here we go. Trump was, they say, what does this all mean? Trump was absolutely correct to fire the BLS commissioner. I agree. I totally agree. But it wasn't political. It was just incompetence and and methodology. So Trump was right to fire them but wrong in his rationale for firing them. There was virtually no domestic job creation in the last year Biden administration when one excludes the hundreds of thousands of illegal aliens who entered the well even when you include these revisions there was very little job creation. We're going to get to that in just a moment. Um or a hell of a lot less than we thought. That's for sure. But you know, see how Zero Hedge is trying to spin it just like Vance where it's all about Biden, Biden, Biden, and oh my gosh, his economy was so bad. But the exact same thing applies to Trump, Trump 2025. And by the way, it applied to Trump uh 2018 uh based on the revisions that we looked at earlier right here in 2019 where they downwardly revised by, you know, call it 500,000 jobs. So this is something that we should expect to see if all is being equal. And again, the the variable there is the new yes man that Trump has hired to come in and run the BLS. But if there was virtually no domestic job creation based on the bad methodology for Biden, guess what? There's virtually no domestic job creation, if not negative job creation in 2025 under Trump. Okay, now let's get over to the numbers in 2024 more specifically because what this revision captured was April 2024 through March of 2025 and are the third revisions, but then they go to the benchmark revisions. So these are these are not the benchmark revisions. They're just the third kind of monthly revisions. They revise them a lot obviously. In fact, I guess the total would be five times. Well, no, the revi the revisions would be four times because you come out with your headline number. That's first. And then you got the second number which is the first revision. Then you've got the third number which is the second revision. And then you do the preliminary benchmark and then the final benchmark. If I'm understanding it correctly, that's kind of the process for the BLS. But look at the numbers as they are right now or prior to this benchmark that just came out today that downwardly revised the numbers by almost a million jobs. In August, we were only at 78,000. August 2024. Look at October. We're only at 43. So I mean what are the probabilities those months would have been negative? Probably pretty high. And then we go back to what I was talking about earlier when how often do you see a negative non-farm payroll print or several non-farm negative non-farm payroll prints within the span of let's say 6 8 n months. How often do you see that outside of a recession? Almost never. Almost never. Sometimes you see a one-off due to weather or a big strike or something like that, but you I I can't find a time where you just see this downward trend and within a 9-month period, you get six, seven, eight months, whatever, after revisions that were actually negative. So what I'm assuming there because we do have a negative number for June that we get another with these more with the numbers we got today. I'm assuming that August goes negative. August 2024. I'm assuming October goes negative and then let's go up here. I would assume that May would definitely be negative. I'm only at 19 right now. And so when we get the next uh preliminary revision, I'm sure that would probably be negative. And you know, how many negative numbers are we going to see in for July, August, September? Let's just say that all these are negative. We've got a September. So in the last year, let's say you get let's call it five or six of the months that are negative, if not seven. I mean, how often do you see that outside of recession? I I I don't think you can find a time. It it it doesn't happen. So, that's not to say that it can't. It's just all about the the probabilities. So, what this tells us is that the jobs numbers moving forward are likely uh going to get worse unless the the Trump yes man really sharpens his pencil. And if they get worse, that that means that we're likely um potentially even in a recession right now. And remember, they revise the GDP numbers just like they reise the the non-farm payrolls. So just because we have positive GDP and by the way we had negative GDP Q1 um that doesn't necessarily mean that we avoid a recession even as defined by the NBER and what's interesting is we have had uh some recessions that the NBER has defined as a recession without an actual uh two quarters of negative real GDP. I'm 95% sure. 95% sure, but I don't have that uh chart in front of me, so don't don't quote me on that one. So, we can see this playing out in yields. I think we discussed that yesterday. Yields are up a little bit today, but my goodness gracious, look what they've done over the last month, as you would imagine, just straight down. uh we're at four I mean they're down call it 22 basis points on the 10-year or the last few weeks uh that's a significant move and what's going to be huge coming up is going to be the CPI numbers that's going to be huge because right now we're at 92% 25 basis point cut and 8% 50 and I think that's because the market is predicting that we're going to probably have a hot PPI or at a hot CPI. And let's go over to the calendar so you guys can see what the expectations are. The expectations right now are for month over month.3 on the PPI and month- overmonth.3 on the CPI. So, let's just say we get a point 4 and a point 4. Um, I think that's kind of what the market is baking into the cake right now with these odds of a 50 because if we get lower than expected, so let's just say we get a month- over-month number at uh, you know, 0.1 and then on the PPI and then on the CPI, let's say we get month over month at zero. Now all of a sudden you you're gonna you're going to see those odds go from 8% to What would I say? Probably 35. If we get a really low CPI number, I'll bet you these numbers go to 30 35 as far as a 50 basis point cut. All right, lots of stuff happening guys right now. And you can see, and by the way, we didn't even talk about PE ratios because then the question becomes, how often does a recession lead to a bare market, and I actually just did a whiteboard video, so it's right on the top of my head. And we had a substantial bare market in 74. I'm sure you guys know that from looking at the charts. Obviously, huge bare market.com, huge bare market GFC, but what what what's different and unique about the bare or the the small declines that we had during recessions in the early 80s was the PE ratios. So, going into 74, the PE ratios for the S&P 500 very close to 20. And when you look at the PE ratios going into.com, over 20. When you look at the PE ratios going into the GFC, I believe that was also over 20. And when you look at the PE ratios going into the recessions of the 80s, early 80s, it the pees were like seven or eight. So, you didn't see a huge decline there in the S&P. So, where are we now? Well, actually, I can I can I've got that chart up because I just did it on the whiteboard today. the PE ratio where we are right now for the S&P 500 29. Woohoo. All right. So, what does this tell you? Does this tell you that we're going to have a stock market crash or a bare market if we go into a recession? No. Again, there are no certainties, only probabilities. But it's telling you that the market is far far more susceptible to a big downturn if we go into an economic slowdown than it would be let's say back here in you know 1979 when the average PE on the S&P 500 was seven seven compared to 29 today and we're getting close to 30. I mean the question becomes where were we prior to the.com and we were right around you know right here 2630 I you can see me going back and forth and right here it kind of peaked at 33. I mean these are nosebleleed levels. So the question is you know do you want to be a buy and hold investor right now and just buy the dip? Uh I don't know. I mean, look at Warren Buffett is the most famous buy and hold investor of all time. And what's he doing? You guys know this from watching my videos. He's sitting on the biggest pile of cash he has ever had relative to the size of his portfolio. And look at the Buffet rule, right? Look at the the the market cap to GDP. I mean, that's at nosebleleed levels as well. So, you know, sure, if you're buy and hold, yeah, you might do okay or the next 10 years, but you do not have the odds on your side. You do not have the odds on your side. So, what do you one thing you can do if you're an average retail investor and you're looking at this saying, "Okay, I'm completely confused. Uh, it seems like everything is in a bubble and it seems like there's just this extremely high probability that my stock portfolio, my 401k gets a haircut and I'm scared shitless. And I'm sure that's something or a feeling that a lot of you resonate with and you're losing sleep over this. All you see is chaos and you're looking for clarity. If that's you, um, you can check out the investment community that I have with Lyn Alden and Chris Macintosh where we take people like you by the hand and help them navigate this crazy crazy world to hopefully not just protect their wealth, but to grow their wealth, to build wealth and thrive in this world of out of control central banks, big governments, and a declining domestic economy and a weakening labor market while at the same time the United States debt is just completely skyrocketing. Deficits are skyrocketing. We've got tariffs. We've got all of these other factors that make this environment very volatile, very tumultuous, and very very difficult to navigate for the retail investor because the probability that that buy and hold uh investing strategy will work over the next two, five, 10 years. The probability of that working is incredibly, incredibly low. So, I'll just leave a link in the description to the investment community I have with Lyn Alden and Chris Macintosh, Rebel Capitalist Pro. All right, guys. Enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market, capitalism. We'll see you on the next video.
Holy Sh*t…You're Not Going To Believe This
Summary
Transcript
Hello fellow robo capitalists. Hope you are well. I can tell you what's not doing well right now. That would be the labor market. In fact, the data we got today was the worst data in history. Now, let me say that again. The data we got today was the worst data in history in regards to the revisions from the non-farm payroll. Worse than the GFC. Absolutely true. Let me adjust my the volume off a little bit there. Sorry for those of you just got your eardrums blasted. But let's get into the important stuff here, guys. The BLS did their benchmark revisions. their first round of benchmark revisions. And let's go over the details. Let's see. First and foremost, let's go to the BLS. Just go straight to the source. And then we're going to go over and get into the nuance over on Zero Hedge. And then we're going to connect some dots and go back to I don't know something called the yield curve. Have you guys ever heard me talk about that? I'm going to I'm going to pat myself on the back a little bit throughout this video. Hopefully you guys can appreciate that. Here we go. Who? Not. There we go. Right here. Out today. So, we have way to share your screen. Ah, right. That'll just build anticipation. It'll build the tension. Right Josh? Here we go. So, from the BLS today, drum roll please, we had a revision of a mere 9001,000 jobs. Basically, a million jobs just Oh, oh, oh, look, there's a squirrel. Remember what what happened to strong and resilient? Yeah, the labor market and the economy, it's very strong and resilient. So long as you're overstating the jobs numbers by oh, I don't know, a million. And and remember this isn't the revisions or this is a different set of revisions, a different time frame from the revisions we got last year. Remember that the 818,000. So last year's revisions 818,000 as far as the first round of the benchmark revisions. This year it's 911. And by the way that doesn't include what we've seen for 2025, April, May, June, July. And I'd like to remind you that even before these benchmark revisions, the June number was down downwardly revised to a negative number 13,000. And when you include these revisions and go back and look at what happened in 2024, there's a very high probability that at least a couple of months in 2024, the non-farm payrolls should have been negative. So think about the narrative that we have had for the last year and a half. What was it? The economy is booming. The economy is strong and resilient. The labor market is on fire. We have way way way way too many jobs and not enough workers. The labor market's very tight as they say. And then everyone is looking at the interest rates and the yield curve saying I I don't know. And then for all the you rebel capitalists out there that just use good oldfashioned common sense, you're driving down the street and seeing homeless camps or you're going into your local Walmart and seeing the cuticle scissors that are behind, you know, steel bars locked up. You can't even get a can of shaving cream for heaven's sakes. And you're like, I don't know. the economy is booming and we have to lock up a a you know we have to lock up the the shaving cream. That doesn't make any sense. And for those of you who are paying more attention, all you have to do is just look at a yield curve and twos and tens go back in history and say, "Yeah, I don't know. Every single time we have this yield curve inversion thingy, we have a recession, if not at the very least an economic slowdown." So, the probability that we would have an economic slowdown or would not have one, the probability that it's different this time, eh, I don't know. Pretty low, right? We'll get back into that in just a moment. So, now let's go over to Zero Hedge. And here we go. Worst revision in history. In fact, how bad was it? Before we get into this, let's give you some context here to show you that it absolutely was worse than the revisions for 2008 GFC. Check this out. So, here are the largest downward US payroll benchmark revisions since 2005, which would be the largest ones because of the population and the size of the workforce um based on BLS data. So today we get negative911,000. 2009 we had for the the uh 2024 period into 2000 excuse me from the 2008 into 2009 period the basically the the the the really really the the worst part of the GFC it was92,000 and oh by the way when everyone was telling us that it's a just wildly strong economy back in 2024 that was downwardly revised to 598,000. Now, it was 818, but the last round that I think came out in January of the benchmark revisions took it from 818 down to 598. So, this 911 is preliminary, right? But based on the way things are going, it might just when we go to the next round in uh January, February for the final benchmark revisions. I mean, I don't see why it wouldn't go higher than than a million. So that's just to give you some context. And by the look at this, so it's not just the GFC. It's not just 2024. Look at the other time frames here. I I mean these are the 10th the 10 most extreme going back to 2005 and coming in at number 10 was minus6,000 that was the 10th most extreme in the last what 20 years so I guess that's just half so let's just go to the fifth so that would have been 2023 and the fifth worst revisions that we had over the last call it 20 years was negative 187,000 negative 187,000 and today we had a negative 900 11,000 I mean strong and resilient sure enough yes forget about those steel bars locking up everything at Walmart that that that doesn't mean anything that that's just um yeah that just that just means that uh crime Crime is on the rise for some reason. Has nothing to do with the economy, though. The economy is booming, running on all eight cylinders. All right. Now, let's get into Zero Hedge. And I get it. That has a lot to do with policing and defund the police and all that, but even outside of the defund police thing. Um, and even a lot of the conservative areas in conservative states that I've been to, they're still locking up everything at Walmart. So, anyway, getting back to it here. So, two weeks ago before both Bloomberg and Reuters, we told subscribers, "Brace for another huge negative payroll revision." I mean, good on them. Good on Zero Hedge, but I mean, again, all we had to do is just look at the yield curve. And and by the way, how many people in the comments in the in the chat on social media when we bring this up told you or told me that, "Oh, this time it's different, George. This time it's different." What you don't understand is fill in the blank. What you don't understand is there's no issuance at the long end of the curve. And that's why it's inverted. And if we just had more issuance, then the curve would be upwardly sloping like we would have in a booming economy. And then you just give it a little critical thought like I don't know because the longing of the curve is all about growth and inflation. It's not really about supply of treasuries because the the banks are going to increase demand if there's an increase of supply that deviates that 10-year yield, let's just say using as an example, from growth in inflation expectations. In other words, nominal GDP expectations, right? So, we talk about that all a lot on this channel, so I won't dive into that. But the main point here is just people were just like they do every single time. They just brush it aside, brush it aside, brush it aside. And then same thing with the psalm rule. Brush it. Oh, that doesn't matter anymore because it's all about immigration. Oh, the psalm rule is irrelevant because we've had all of these uh immigrants come in. I was listening to a podcast yesterday where they were talking about how this 22,000 number that we got last month or just last week for the non-farm payroll and the negative revision, it wasn't that big of a deal because this is all just immigrants uh or you know illegals or whatever leaving the United States and it doesn't matter because it's not going to impact the unemployment rate because we have you know this many jobs and we have this many workers, but if this many workers leaves, then all of a sudden we're in an equilibrium where even if we have fewer jobs, then it doesn't even matter. I I can't get my head around that argument because although it is true, if you have massive amounts of people leaving the workforce or the labor force, it is not going to impact the decline in jobs, won't impact the unemployment rate or it will impact it to a lesser degree. For sure, for sure. for sure. But does that mean that it doesn't impact the economy? I mean, come on. This Let's do a thought experiment. If we had a 100 million people leave the workforce tomorrow, let's just say they all move to Mexico or something like that. 100 million people, right? So, we have 100 million fewer people working in the United States. But let's say the amount of jobs goes down by 100 million. So, the unemployment rate stays at 4.3. What would you say would happen to the economy? Would it just would would nominal GDP just stay right at 30 trillion or whatever it is today? Of course not. GDP would plummet would absolutely drop off a cliff. So it it I mean yeah we can look at the unemployment rate but is it really about the unemployment rate or is it about how many people are actually working in the United States producing goods and services being paid and then spending that money back into the economy therefore aggregate demand. And if you just just because we're at an equilibrium if that equilibrium is way down here as opposed to up here you ain't going to have a good economy. You're going to have an economic contraction. But anyway, getting back to it here. Now, what I thought was interesting is the biggest revisions were in leisure, hospitality, and professional and business services. This was something that every single month I would see the non-farm payroll, and they just have blowout numbers in leisure and hospitality and in business services. I just it's a headscratcher. It's just like, what? Like, okay, I mean, I I get it. people are traveling a lot but in the last year and a half and then you juxtapose that to what the airlines are telling you and remember just a few months ago the airlines were coming out and saying look I don't know what you want to call this economy but for us it's a recession we have seen that level of demand destruction for domestic travel to where th this is the exact for us the airlines it's no different than what we would expect to during a recession. So, while the airlines are telling us that, you've got these leisure and hospitality job numbers just going up and up and up and up and up. You're like, "Okay, something doesn't make sense here." And sure enough, when you actually reconcile and get real numbers, it was because the job numbers were ridiculous. The job numbers were wildly overstated. And I don't think it was a political thing because the jobs going back to this were wildly overstated in 2019 and if I'm not mistaken Trump was the president then uh they wildly overstated in 2024 Biden wildly overstated in 2025 which includes uh most of Biden but part of Trump but I guarantee you they're going to be wildly overstated for the rest of 2025 which would be all about Trump. So, it's it's it's not necessarily political. It's really all about their methodology being horrific and then just a lack of competence. A lack of competence to actually acknowledge the fact that your methods suck and have the ambition or the work ethic, the wherewithal to just go out there and say, "Hey, listen. We need a change." and and and me as the head of the BLS, I'm going to institute that change because that's my job. That's my job to give the best numbers possible to the American people. Anyway, let's get back to Zero Hedge here. So in accordance with usual practice, the final benchmark revision will be issued on February or in February 2026 with a publication January 2026 employment situation news release. So by the way, that's why we go from 118. I know I'm bouncing around here a lot, but that's why we go from the 118 down to the negative 598 is because the first revision that we got last September was the 818 and then they revised that for the final time and and it turned out to be a negative 598. That's I just want to make sure everyone's on the same page there. Okay, getting back to zero hedge annual benchmark revisions to non-farm payrolls. Yeah, and this is just another way to visualize exactly what we were saying. Biggest negative payroll revisions on record. And here you go. 2009 basically GFC and in fact 2024 was at least the preliminary was almost as bad as the GFC and then 2025 as of right now it's even worse. I don't know how you could argue right now that the economy has been strong. Like I I I'm sure I'd be able to argue that if you said, "George, we're putting you in a debate against someone who's very bearish or believes the economy has been extremely weak and you have to take the position that the economy has been strong and resilient and will remain strong and resil." I'm sure I could come up with an argument, but I don't know what it would be right now. It would be pretty tough. It would be pretty tough. monthly payroll growth. You're going to see the same thing here. Uh this is by sector. Okay. Okay. This is from Bent. So, how is he going to spin this? I think you know what he's going to do here. So pushed back last week when I warned that the BLS jobs data would show massive downward revision. Okay. Again, Scott, I don't know if you're if you're if you're that uh what would the word be? Um if you're that much of a visionary because all you had to do is just look at the yield curve. I I mean even right now you've got the 10-year Treasury trading at 4.08 and you got Fed funds at 4.3. that that in and of itself tells you everything you need to know about the the strength of the US economy. He says, "Now it's official. 2024 job gains were exaggerated by nearly 1 million workers." But you notice how he leaves out 2025. I wonder why he's doing that. And this is the top of an already reported uh 578 uh 577,000 in downward revisions. This brings to Biden. You see, he'll just keep talking about the Biden, Biden, Biden, Biden. And what he won't mention is that we're seeing the exact same phenomenon with Trump and we'll likely see it throughout the rest of 2025. I don't know why it would change. I guess maybe because the Trump yes man is going to be put in place, and he's highly incentivized to really, you know, juice the numbers and not just the headline number, but also the revisions. So that will be really interesting when he takes over. We've just got the numbers going, you know, in a trend straight like this. And when he takes over, if you just see it go whoop right back up, you're going to be like, "Ah, okay. I see what's going on here. I see what's going on." Here's JD Vance. It's difficult to overstate how useless BLS data had become. A change was necessary. tone. Oh, to I guess that's a typo. Uh to restore confidence. Uh I don't know if that's going to restore confidence, JD. Um not restoring confidence in me. Um because although the numbers were useless, at least we had a pattern. At least we would know that the headline number was going to be this. and the pattern was downwardly revise, downwardly revise, downwardly revise. That's something that was consistent. So, you could kind of bake that into your analysis. But now, I I would say there's more uncertainty because the new yes man that is going to be u beholden to Donald Trump is going to have this burden on their shoulders that what do I do? Um, well, if I want to keep my job, the numbers better look good, even if they are or if they're not. And I'm not saying that he's going to lie or that he's going to juice the numbers. I'm just saying that he is highly highly highly incentivized to. And by the way, I don't see JD talking about the Well, I guess he is. He's trying to deflect the fact that the new non-farm payrolls are horrible and the revisions in June down to negative and that the trend is horrible even for 2025. I guess he's trying to deflect that by saying that the BLS sucks and they're incompetent and their methodology is bad. not really kind of dodging the fact that yes, they are bad, but they were bad because they overstate the numbers, which is just as applicable to your guy as it is to Biden. So, here we go. Trump was, they say, what does this all mean? Trump was absolutely correct to fire the BLS commissioner. I agree. I totally agree. But it wasn't political. It was just incompetence and and methodology. So Trump was right to fire them but wrong in his rationale for firing them. There was virtually no domestic job creation in the last year Biden administration when one excludes the hundreds of thousands of illegal aliens who entered the well even when you include these revisions there was very little job creation. We're going to get to that in just a moment. Um or a hell of a lot less than we thought. That's for sure. But you know, see how Zero Hedge is trying to spin it just like Vance where it's all about Biden, Biden, Biden, and oh my gosh, his economy was so bad. But the exact same thing applies to Trump, Trump 2025. And by the way, it applied to Trump uh 2018 uh based on the revisions that we looked at earlier right here in 2019 where they downwardly revised by, you know, call it 500,000 jobs. So this is something that we should expect to see if all is being equal. And again, the the variable there is the new yes man that Trump has hired to come in and run the BLS. But if there was virtually no domestic job creation based on the bad methodology for Biden, guess what? There's virtually no domestic job creation, if not negative job creation in 2025 under Trump. Okay, now let's get over to the numbers in 2024 more specifically because what this revision captured was April 2024 through March of 2025 and are the third revisions, but then they go to the benchmark revisions. So these are these are not the benchmark revisions. They're just the third kind of monthly revisions. They revise them a lot obviously. In fact, I guess the total would be five times. Well, no, the revi the revisions would be four times because you come out with your headline number. That's first. And then you got the second number which is the first revision. Then you've got the third number which is the second revision. And then you do the preliminary benchmark and then the final benchmark. If I'm understanding it correctly, that's kind of the process for the BLS. But look at the numbers as they are right now or prior to this benchmark that just came out today that downwardly revised the numbers by almost a million jobs. In August, we were only at 78,000. August 2024. Look at October. We're only at 43. So I mean what are the probabilities those months would have been negative? Probably pretty high. And then we go back to what I was talking about earlier when how often do you see a negative non-farm payroll print or several non-farm negative non-farm payroll prints within the span of let's say 6 8 n months. How often do you see that outside of a recession? Almost never. Almost never. Sometimes you see a one-off due to weather or a big strike or something like that, but you I I can't find a time where you just see this downward trend and within a 9-month period, you get six, seven, eight months, whatever, after revisions that were actually negative. So what I'm assuming there because we do have a negative number for June that we get another with these more with the numbers we got today. I'm assuming that August goes negative. August 2024. I'm assuming October goes negative and then let's go up here. I would assume that May would definitely be negative. I'm only at 19 right now. And so when we get the next uh preliminary revision, I'm sure that would probably be negative. And you know, how many negative numbers are we going to see in for July, August, September? Let's just say that all these are negative. We've got a September. So in the last year, let's say you get let's call it five or six of the months that are negative, if not seven. I mean, how often do you see that outside of recession? I I I don't think you can find a time. It it it doesn't happen. So, that's not to say that it can't. It's just all about the the probabilities. So, what this tells us is that the jobs numbers moving forward are likely uh going to get worse unless the the Trump yes man really sharpens his pencil. And if they get worse, that that means that we're likely um potentially even in a recession right now. And remember, they revise the GDP numbers just like they reise the the non-farm payrolls. So just because we have positive GDP and by the way we had negative GDP Q1 um that doesn't necessarily mean that we avoid a recession even as defined by the NBER and what's interesting is we have had uh some recessions that the NBER has defined as a recession without an actual uh two quarters of negative real GDP. I'm 95% sure. 95% sure, but I don't have that uh chart in front of me, so don't don't quote me on that one. So, we can see this playing out in yields. I think we discussed that yesterday. Yields are up a little bit today, but my goodness gracious, look what they've done over the last month, as you would imagine, just straight down. uh we're at four I mean they're down call it 22 basis points on the 10-year or the last few weeks uh that's a significant move and what's going to be huge coming up is going to be the CPI numbers that's going to be huge because right now we're at 92% 25 basis point cut and 8% 50 and I think that's because the market is predicting that we're going to probably have a hot PPI or at a hot CPI. And let's go over to the calendar so you guys can see what the expectations are. The expectations right now are for month over month.3 on the PPI and month- overmonth.3 on the CPI. So, let's just say we get a point 4 and a point 4. Um, I think that's kind of what the market is baking into the cake right now with these odds of a 50 because if we get lower than expected, so let's just say we get a month- over-month number at uh, you know, 0.1 and then on the PPI and then on the CPI, let's say we get month over month at zero. Now all of a sudden you you're gonna you're going to see those odds go from 8% to What would I say? Probably 35. If we get a really low CPI number, I'll bet you these numbers go to 30 35 as far as a 50 basis point cut. All right, lots of stuff happening guys right now. And you can see, and by the way, we didn't even talk about PE ratios because then the question becomes, how often does a recession lead to a bare market, and I actually just did a whiteboard video, so it's right on the top of my head. And we had a substantial bare market in 74. I'm sure you guys know that from looking at the charts. Obviously, huge bare market.com, huge bare market GFC, but what what what's different and unique about the bare or the the small declines that we had during recessions in the early 80s was the PE ratios. So, going into 74, the PE ratios for the S&P 500 very close to 20. And when you look at the PE ratios going into.com, over 20. When you look at the PE ratios going into the GFC, I believe that was also over 20. And when you look at the PE ratios going into the recessions of the 80s, early 80s, it the pees were like seven or eight. So, you didn't see a huge decline there in the S&P. So, where are we now? Well, actually, I can I can I've got that chart up because I just did it on the whiteboard today. the PE ratio where we are right now for the S&P 500 29. Woohoo. All right. So, what does this tell you? Does this tell you that we're going to have a stock market crash or a bare market if we go into a recession? No. Again, there are no certainties, only probabilities. But it's telling you that the market is far far more susceptible to a big downturn if we go into an economic slowdown than it would be let's say back here in you know 1979 when the average PE on the S&P 500 was seven seven compared to 29 today and we're getting close to 30. I mean the question becomes where were we prior to the.com and we were right around you know right here 2630 I you can see me going back and forth and right here it kind of peaked at 33. I mean these are nosebleleed levels. So the question is you know do you want to be a buy and hold investor right now and just buy the dip? Uh I don't know. I mean, look at Warren Buffett is the most famous buy and hold investor of all time. And what's he doing? You guys know this from watching my videos. He's sitting on the biggest pile of cash he has ever had relative to the size of his portfolio. And look at the Buffet rule, right? Look at the the the market cap to GDP. I mean, that's at nosebleleed levels as well. So, you know, sure, if you're buy and hold, yeah, you might do okay or the next 10 years, but you do not have the odds on your side. You do not have the odds on your side. So, what do you one thing you can do if you're an average retail investor and you're looking at this saying, "Okay, I'm completely confused. Uh, it seems like everything is in a bubble and it seems like there's just this extremely high probability that my stock portfolio, my 401k gets a haircut and I'm scared shitless. And I'm sure that's something or a feeling that a lot of you resonate with and you're losing sleep over this. All you see is chaos and you're looking for clarity. If that's you, um, you can check out the investment community that I have with Lyn Alden and Chris Macintosh where we take people like you by the hand and help them navigate this crazy crazy world to hopefully not just protect their wealth, but to grow their wealth, to build wealth and thrive in this world of out of control central banks, big governments, and a declining domestic economy and a weakening labor market while at the same time the United States debt is just completely skyrocketing. Deficits are skyrocketing. We've got tariffs. We've got all of these other factors that make this environment very volatile, very tumultuous, and very very difficult to navigate for the retail investor because the probability that that buy and hold uh investing strategy will work over the next two, five, 10 years. The probability of that working is incredibly, incredibly low. So, I'll just leave a link in the description to the investment community I have with Lyn Alden and Chris Macintosh, Rebel Capitalist Pro. All right, guys. Enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market, capitalism. We'll see you on the next video.