美国非农就业不及预期，失业率因劳动力参与率上升而走高

Hey everyone and thanks for jumping back into the macroverse. Today we're going to talk about the most recent labor market report and we're going to go through uh what that looks like. We'll also talk a little bit about yields uh and a few other things. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and also check out the upcoming ITC conference, Investing Through the Cycles Conference.

Link is in the description below. and we're now less than 2 months away. So, make sure you guys get your ticket. The unemployment rate came in slightly higher than before. It it's somewhat benign in in in one sense because last month I believe it came in at 4.14% which rounded to 4.1 and then this month it came in at 4.18% which rounded to 4.2. So, the unemployment rate has started to move up a little, but you know, we're still in the early innings to know if it if it really matters or not.

Now, what's interesting is if you look at the unemployment level by reason for unemployment, the people who have lost jobs, that actually went down. So, that actually dropped from 3.25 25 million to 3.2 million. And if you look at even job losers on temporary layoff, like that basically was flat. If you look at permanent job losers, that went down. If you look at job levers, that went down a lot. So then why did the unemployment rate go up?

Well, there's a few reasons. One reason is because people just simply trying to find a job are having a hard time. If you look at re-entrance to the labor force, that went up. And then if you look at new entrance to the labor force, that also went up from 702,000 up to about 818,000, which if you ignore the December move, the current number is as high as it's been uh in over a year. Okay. So what's what's occurring right now is that hiring is down, but layoffs are also down.

If you look at hires, hires are really low still, right? Like they haven't really recovered back up. And so as long as hiring is down, it's actually making it more difficult for people who don't have a job to find one. And that's also sort of baked into the job openings as well. Like job openings has been relatively soft for a while. So people are having a harder time finding a job, not necessarily keeping a job, at least right now.

If you look at layoffs and discharges, that also went down. So what's happening is that more people are choosing to participate in the labor force. If you look at the labor force participation rate, this is this was actually one of the main reasons that the unemployment rate was going down for the last year is because if you look at the labor force participation rate, that had also been trending down pretty quickly. You know, cuz back in September of 2025 or October of 2025, the labor force participation rate was 62.5%.

But that dropped a full percentage point right down to 61.4. 4 and now it went back up uh to 61.8. So a large reason for the increase in the unemployment rate is because of the labor force participation rate actually expanding. And if you look at the unemployment rate and I think we can sort of look at it and look at it as a function of age. If you look at it for say 16 to 19 year olds, that had a a fairly large increase the last couple of months.

So again, 16 to 19 year olds are generally going to be new entrance into the labor force, right? That's gone up from 12.1% to 14.5. Now, you might say, well, the S&P, the NASDAQ, all that stuff is basically at all-time highs. Again, markets generally go to all-time highs. Occasionally, you have corrections, but markets generally go to all-time highs. And also 16 to 19 year olds are not the ones keeping the index up in the first place.

Now if you look at 20 to 24 year olds, these would represent, you know, even potential college graduates that had fallen a lot from September 2025 and it was still fairly low recently, but it's started, you know, moving back up, right? Like now it's back up to 8%. And so what you're seeing right now, if you're watching this video and you're, you know, younger, right? Let's say you're in college or you're just out of college and what I'm saying doesn't really make sense because it's hard for you to find a job.

So when people talk about their it not being a difficult labor market, it is for you, right? So, we shouldn't we shouldn't gaslight people that are in their early 20s and be like, well, you know, just go find a job because we have a great economy. It it it actually is a lot harder. The unemployment rate for people between the age of 20 to 24 is around 8%. Okay, which is, you know, it's starting to get up there. Um, and I think that's important for us to recognize that the economy is is sort of split into different parts.

Now, when you go look at it for 25 to 54 year olds, that's where it hasn't really moved. It's been at 3.6% for the last several prints, and it's down since February of 2026. And you could argue that this cohort is some of the people more responsible for keeping the S&P at those all-time highs. Okay, now that covers that side of it. Now, we also had the total non-farm payroll, which came in weaker than expected. All right, total non-farm came in at just 29,000, but consensus was well above that, right?

It was well above that. And if you look at I believe we have it here on the uh the calendar you can see that it came in at 29,000 previous was 133,000 which I believe was revised down already and then consensus was actually 90,000. So while the unemployment rate went up a little and it was mainly due to people entering the labor force and more participation rather than people getting laid off. If you look at non-farm payroll hiring and whatnot, you can see that it it came in relatively weak.

And so if you look at that on this chart and look at a quarter overarter basis, you know, it's only at 152,000. Now year-over-year, it is at 496,000. Recessions tend to occur when this goes below zero. So, every gray shaded region on the chart represents a recession in the United States, and they all correspond to the year-over-year change in non-farm payroll going negative. And you can see it came really close to being negative at in early late 2025 and early 2026, but then it rebound slightly.

And and so this is something if it were to deteriorate again with rising rates like it did in 2022 2023, well there's not as much excess now, right? There used to be a lot more excess. Now there's not there's not really a lot of wiggle room in in this metric. So, this is is something to continue to watch because on one hand, the the the payroll report isn't really that bad by a lot of measures, but for younger people, it kind of is.

And it it is hard to find a job if you don't already have one. It's the people that already have a job are having they're not having a hard time holding on to it. Uh it's it's been fairly easy to hold on to it. I'm not saying that it's been easy for everyone. I know there are people that have been laid off, but layoffs are part of a normal economy. If you if you look at layoffs and discharges, we already showed this chart earlier.

We're we're at levels below where we were before the pandemic, right? Like if you have a moving average of this, a seven-month moving average, it's currently at 1.74, but before the pandemic, you know, it was trending above that. So layoffs are normal in all economies. It's just that when you have recessions, it tends to really start to go up. And that is what you don't want to see. Okay. Now, what's really interesting is how the labor market result has affected yields and what yields are doing to the bond market, right?

To to credit spreads as well. If you look at at um yields, what you'll see is that the long end of the yield curve, right? So, if you look at at the 10-year yield, the 20-y year, the 30-year, that's up on the day, which is kind of interesting because now you have two somewhat soft reports. Okay, you have the soft PCE rep