The Keystone Speculator's Unemployment Rate Chart; UNITED STATES LABOR RECESSION STARTED 9/8/23 NOW 15 MONTHS ALONG AND COUNTING

THE UNITED STATES LABOR RECESSION STARTED ON 9/8/23 AND IS 15 MONTHS ALONG AND COUNTING. The country also remains in a housing recession and manufacturing recession but an overall US recession continues vacationing with Godot. 2024 is the Year of the Godot Recession (it has not shown-up yet). 

The US economy used to be dominated by the housing and auto sectors. When they go into recession, the whole country would drop into recession. 100 years ago, the railroads ruled the roost. Housing and autos/manufacturing are now second tier players in the recession prediction game. Semiconductors are the new sheriff in town and the chips are now the dominant influence on the stock market and economy. Think about it. Nearly every product you buy nowadays has a chip in it.

Despite the lousy labor, housing and manufacturing industries, the Godot Recession occurs (the recession has not yet arrived). This is because semi's now rule the roost and are the most important metric. The AI hype has only served to bolster this top-spot, king-of-the-hill position. In addition to the chips holding up the markets and economy, so are the wealthy class that have benefited greatly due to the last 15 years of Federal Reserve money-printing.

The top 20% of Americans, the have's, made filthy rich by the Federal Reserve's obscene money-printing that sends asset and stock market prices higher, account for 50% of the consumer spending in the United States nowadays. The other 80% of have-not's account for the other half of spending and they are not buying another vacation home, or yacht, or rare diamond bracelet, or brand new Mercedes convertible.

One-half of Americans do not own one single share of stock and did not make millions effortlessly via the Fed's money-printing. It is crony capitalism filth. Be glad it is in its last throes. The have-not American peons are buying food, diapers, baby formula, and necessities; consumer staples. They wonder how they will pay rent or the mortgage with the car and home insurance rates going through the roof. They are exhausted from working two jobs and watching their savings vanish as they listen to the upper classes brag about their new cars, clothes, jewelry and homes, courtesy of the Fed of course.

So 2024 is a tale of the have's and have-not's. Even the wealthy cannot spend limitless. They only need one $15,000 freezer, $2,000 wine rack and $40,000 cement driveway. After that it is time to kick back and enjoy life.

The unemployment rate increases on Friday, 12/6/24, from 4.1% to 4.2%. The 8/2/24 jobs number was 4.253% rounded up to 4.3% while the 9/6/24 number is 4.221% rounded down to 4.2%. The 10/4/24 number was 4.1%. 

The low prints were a 3.4% rate in February 2023 and May 2023 precursors to the start of the labor recession, and rising unemployment rate, in September 2023. The US unemployment rate is now 0.8% to 0.9% above the lows last year almost one whole percentage point; not good.

The blue line is diverging up and away from the red line which means trouble ahead and it is time to watch your wallet. Over the coming weeks and months, some of you will be called into the boss's office that will tell you to clear your desk drawers, pack up your family pictures, house plant that needs watered, and change for the coffee machine, and get the Hell out. Oh yeah, hand in your badge and door card since you are no longer allowed in the building. Now get out. Beat it.

Young adults under 40 years old will learn a lot about yourselves and the people around you as the country slides into recession. You lived through the pandemic recession but that was an oddball animal in its own right. In an economic recession, you or your significant other will likely lose your job, maybe both of you, so obviously you should already be planning for such an outcome. Also understand, that if you think it is easy to get another job now and you are not worried, you are living a false reality. In a recession, hundreds of other folks will now want the same available job and the guy that told you to call him anytime you wanted to work for him now does not even take your phone calls.

For the next Jobs Report on 1/10/25, the unemployment rate, now at 4.2%, can be 4.0% or higher for the US labor recession to continue. The rate would need to drop to 3.9% or lower to nullify the labor recession indicator after 15-plus months and instead point towards a labor recovery and steadier growth pattern ahead. With the rate at 4.2% now, remaining in an uptrend, it is hard to imagine that a 3.9% print will occur in 4 weeks; it is very unlikely. It is easier to envision the rate remaining above 4% going forward and actually expanding higher back to the 4.3% and higher. The unemployment rate for blacks is up to 6.4% and the U-6 rate increases to 7.8%.

Keystone will educate you a little bit on Management 101. Layoffs. Decades ago, you could get sh*t-canned from your job a few days before Thanksgiving but companies started receiving cold-heart reputations so managers got smarter. Typically, if you need to trim the herd, you will layoff employees before Halloween, October 31, because then you will not get accused of throwing families out into the street during the holidays. Thus, if you are still employed after Halloween, your boss likely plans to keep you around until the new year.

However, January is round two. After the holiday fun is over, many companies begin new budgets in January and guess what? You are persona non grata. You are on the layoff list and get sh*t-canned in mid-January as the company charts the new year forward. Thus, continuing the discussion above, it is more likely that the unemployment rate will move higher since some folks, maybe you, are going to get sh*t-canned from your job a month from now. You will plead with the boss stating that he/she told you last week that the company cannot survive without you. The boss will laugh and say you dumbsh*t, we tell all employees that to get more work out of you; now pack your bags and get out.

The tech and semiconductor stocks are likely topping-out as the initial AI hype wears thin. The rich are still spending money but that should lessen going forward. Holiday spending is important since it is propping-up the economy. The weakness in the chip sector going forward, and the wealthy folks tightening-up their spending, will join the ongoing labor, housing and manufacturing recessions, to finally welcome Godot that will arrive with the overall US recession. Happy New Year.