Tony Katz & Dr. Matt Will on July Jobs Numbers

0:00Live from the heartland and the crossroads of America. It's Tony Katz today. So it's a mistrial in the Lindsey Clancy case. What will reconvene when it reconvenes when it does, depending on when it does, I'll bring you what I can because what the judge has said is the jury is not able to come to a decision. I have to declare a mistrial. What Lindsey Clancy's lawyer Kevin Reddington has said is, oh hell no, I want to appeal to the state Supreme Court Massachusetts to force you to force the jury back into deliberations

1:06to come to a decision. The belief that there's one juror holdout whom the defense attorney Reddington has said hates disabled people and is trying to intimidate. Oh, there's a lot of again, this lawyer am I disgusted or am I hiring him? Tony Katz, Tony Katz today, good to be here, good to be with you. It's not the only news going on, but this is all breaking. And I like to like to share with you what's going on. The economics, the jobs numbers that are there. They are impressive. Now I think they're a touch misleading, but they are indeed impressive. When you take a look at these jobs numbers and you realize that they beat the estimates by triple, triple payrolls up 162,000 in August.

2:11The expectation 53,000, that's tripling the expectation. The expectation unemployment would be 4.2%. It was 4.1%. Now even if we want to argue that the unemployment number doesn't really give us a fair assessment of anything, not only did we get, not only did we get the movement regarding this month, they revised up the numbers in July. I think that's more of a story than what we have from these numbers as a whole. Dr. Matt Will joins us right now. He is an economist at the University of Indianapolis and we speak to him on all of the big economic matters. We look at this report, Dr. Will.

3:12The details do indeed matter, but the top line is the so-called experts got it wrong. We've tripled the number and we even revised the month of July up. Trump is a living God when it comes to jobs, all praise his name and that only came from Pete Hackseth. So, walk me through what it is these numbers have told you. Well, first of all, I mean, I'm not going to completely disagree with Pete. I mean, he's got an army behind him and I don't. True. But let's admit, Pete didn't say that. I made that part up. Keep going. Okay. I mean, it's hard to deny these numbers. I mean, it's, some people will say, well, it's only one month. No, it's not really just one month. The month alone was 162,000. Okay. We were expecting 56,000. That's quite a miss. I mean, three times expectations come on people. That's nothing to sneeze at. But then you add on top of that, the up revision.

4:13July was originally down by 23,000. Now July is up by 21,000. That's a nice up revision. Go back to June. That was an up revision again. Can we stop right there for just a moment? We're going to stop right there for a moment because we've had many of these conversations, Dr. Will. And we had them during the Biden years too. And what we noticed was that every revision was down. Every revision went down. It wasn't as many jobs as we were told. It's as if the top line number was purposefully lying to us. What makes this fascinating is that we don't often see the revisions up. And you're not talking about two months of revisions up. How did that come to be in the revising? And then what does that signal to the market? Because the market responded by going down. Well, we'll talk about why the market responded by going down in a moment. But why the revisions? I'm not a conspiracy person. OK, I don't know. And I don't have dated a proof that there's anything going on behind the scenes to manipulate it.

5:17I'll leave for you another investigators out there to figure that out. I'm not going to say it didn't happen. But it is interesting that we see upward revisions now, versus we had downward revisions later. There's no denying that. That's a fact, three good months in a row now. But there's a lot more than just the headline here. OK, yes, we've seen increases across the board, restaurants and bars, 59,000. So there is a certain surgeons of people going to retell establishments. Local government education increased by 42,000. In my opinion, that's the only non-positive upnumber. Because I'm not a big fan of when government increases. Construction, 22,000, manufacturing, up 16,000. And usually health care is one of those things where we see the bump. It was a bump, but only 13. The only thing we saw down that was noteworthy, in my opinion, there's a few down, was information technology. And why do we need to say that? Because that's a reflection of the AI.

6:19Again, we see the AI movement out of jobs into other areas. But Tony, my favorite part of this report was that the U6 number, the nerdy U6 number, dropped. The U6 number is that number that reflects all unemployment, including people that are involuntarily part-time. So you want a full-time job, but you can't find a full-time job, so you're working part-time. So if you look at the U6, which I like that number better, it dropped. We haven't seen that kind of drop in a significant amount of time. It dropped by 414,000. Okay, I'm impressed. It's hard to find something bad in this report. And it's consistent with the manufacturing report that came out a few days ago. We've got to talk about manufacturing. It's exploding. Now let's talk about manufacturing. The doctor, Matt Will, economist at the University of Indianapolis, the manufacturing is exploding.

7:20We've seen these IMI reports. We've seen these numbers going up month after month. We've seen inventories that have been growing. The question is for whom does the manufacturing bell toll? Who is buying this equipment? What type of equipment is it? Is it that we're manufacturing and has that manufacturing still been hampered by tariffs that are still affecting us on the other side? Because we can see good things, but we also still have issues. I don't want to discount the issues. So let's walk through this manufacturing. Who's doing the manufacturing? Who's buying the manufactured good? Okay, well, I want to answer after I answer your other question, which was the prices. The prices are still up, aluminum, chemicals, copper, memory components, metal products, oil-based components, steel, cold-rolled steel, hot-rolled steel, semi-conductors. I can go down the list where commodity prices are soaring.

8:21There is no shortage of high prices in the world of manufacturing. That is a problem. But where do we have some really big demand in things that make your copper products electronic components? A memory printed circuit boards. All these areas are growing. The things you talk about a lot that you're a believer in free trade, and we don't have to make everything here. Well, guess what, Tony? We're making a lot more stuff here now. You can't deny what's been happening in the manufacturing side of this economy except inflation. I mean, even for the second month in a row, we've had manufacturing growth in employment. Manufacturing manufacturing always grows, but we are more efficient with, because of AI and robots and automation. Now we see growth in manufacturing and growth in manufacturing employment. Tony, I don't know what else to say other than inflation. This thing is pretty cool. Talking to Dr. Matt Will economist at the University of Indianapolis, I am here to say,

9:25I like the manufacturing growth. I do believe in building things here. I've always believed in building things here. I make the argument that you don't have to build everything here. In the same way that you shouldn't be outsourcing everything. It's wrong that we develop all our medicines here, and we don't manufacture our medicines here. That's insane. You mentioned the government side of this. We seem to have hired a bunch of teachers, what with kids going back to school, and you see declines in not in healthcare. Healthcare actually went up. You see declines in technology, and there's another space in it alludes me right now. To that end, we're talking about AI, what you would categorize as, of course, economist would has creative destruction, which I've never been a big fan of, of the terminology. But there is reality. In reality is jobs are shrinking in spaces because they're utilizing the tech to cover it. That may not be true six months from now, but it is true today. It may not be true five years from now, but it is today.

10:27We haven't answered the question to why the stock market went down quite a few hundred points. Is it because of just this, this AI move in terms of the jobs, or did they see something else that made them decide to be sad? I like how you say that to be sad. Yes, the attic is a little bit sad. The reason is, first of all, it's not an all or nothing. Tony, it's a spectrum. What this report showed us was a few things. It showed us that there is more of an incentive to fight inflation, and less of an incentive to try to produce employment. How do you produce employment? One of the tools is to cut rates. The market is saying, okay, there is not going to be any rate cuts in the near future. That's what they saw. They were upset that they're not going to get their fix and they're not going to get lower short-term rates because there is no reason to cut rates with a fantastic jobs report like this. They're going to reduce the economy.

11:29Wall Street likes to be juiced, and they're not going to get the juice right now. I'm sorry, Wall Street. They were a little bit sad about it, and I like how you said that. It's a little bit sad. There's also some good news about inflation in this report. The good news is wage inflation didn't exist. Normally you would have job growth and you'd have wage pressure. We didn't see it was a very moderate increase in wages. I'm telling you, this is not a report that you can find much flaw in, and I'll agree, go back, I'll agree with Pete Hexet. It's pretty darn good. Okay, Pete Hexet didn't say that. I'll be a saint again. I don't want to get in trouble with the secretary. Let me give what I think is the only negative of this report. If we're going to put as much to hiring of teachers to government growth as we do, the next report isn't this high. The report's not bad, but I just temper it with, the next report might not be this high, and therefore, but people are going to think that things are worse, but they aren't necessarily.

12:33I just try to, it's a measuring of expectations, I think, overall. Yes, Tony. The next report is not likely to be this phenomenal. I completely agree. Will it be good? I can't predict the future. I'm not going to predict the future, but I can tell you, this is a nice broad based report, the private sector, private sector, 86,000 more jobs in the private service sector. That doesn't even include manufacturing. So private service sector up, manufacturing up. Okay, we had some government growth. It's not 100% perfect, but hiring teachers. I mean, is anybody can complain about that? I mean, the only downs, like you mentioned, there was a little bit, a little bit contraction in motor vehicles and motor vehicle parts, a little bit of decline there. And a little bit decline in financial services. We've had that for a number of months now, financial services declining. I think that's also that information technology issue. I believe financial services is being impacted by AI as well. So that's an AI spin off.

13:34But yeah, you say it's not, you know, there's some things that aren't perfect. I agree. There is a less than perfect report, but it's pretty darn close. Look at you, people who are noticing that doom and gloom, Dr. Will is all sorts of gitty about this, like a schoolgirl who just got a lollipop. I can switch over to, if you want to talk deficits and deficit spending and inflation and tariffs, I am right now, no, no, we're not going to give you that. No, no, you're happy. And we're going to take that into a weekend, dang it. And that's the way it's going to be. You leave your doom and gloom for next week. Okay. Excellent. That's like a plan. Dr. Matt Will economist at the University of Indianapolis. I appreciate you taking the time to be with us. We've got more coming up. I'm Tony Katz and this is Tony Katz today.