The biggest crisis in 2023 can turn out to be unemployment. Try our sponsor Aura for 14 days free – to see how many times your personal information was found on the dark web today. In this episode, Patrick Bet-David reveals the 6 key factors that indicate the coming unemployment crisis.
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So the last couple years if you read The Wall Street Journal you watch the news You're going to hear about inflation Interest rates Everybody's scared about These two numbers inflation is so high Jerome Paul has to keep increasing Interest rates what is the next big Thing they're going to talk about in 2023 you ready it's unemployment here's What we're going to do in this video Today there's multiple formulas they Have to come up with unemployment I'll Share those formulas with you there are Six key factors that is causing this Economy to be an anomaly that even Economists cannot predict what's really Going to happen to the economy you'll See what those six things are and Another thing we'll talk about is called Phillips curve it's something you need To know about that has to do with Unemployment Foreign So let's get right into it a couple Things you'll hear people say today's Unemployment rate is 3.5 but that's for You three but our U6 unemployment rate Is 7.4 and people will say what the hell Is u3 and you'll six we'll talk about That today but let's just look at the u3 Right the unemployment rate historically U.S governments started tracking Unemployment rate in the 50s but Based On data they can kind of track what
Happened in the 20s and the 30s the data They get is the worst unemployment rate We've ever had in the history of America Was in the 30s and the lowest we ever Had was 1.2 percent during World War II In 1944 but it's 1.2 percent because Everybody was kind of forced to go to War so you didn't have a choice you got A job go to war and if we want to talk About post-world war what happened to The lowest unemployment rate it's 2.9 Percent in 1953 and we're at 3.5 today It's not a big difference which means Kind of it's not going to get any better Than it is today maybe a small little Point one point two percent but not Dramatically which means the only Direction it can go right now is what go Up now here's the thing to keep in mind Since then we've had 11 different Recessions and the U.S government has Tried to control markers to not allow Unemployment to go too high and we'll Talk about that but a couple things we Need to know six key factors throws Everything that we've used out the Window on why today's economy is an Anomaly number one we've never had a 128 Month economic expansion and that was Caused because money was so cheap zero To one percent interest rates we've Never done that in the history of the Economy before I want to give a quick Shout out to our sponsors Aura it's very
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Lowered the rates the most times 2001 You know how many times we lower the Rates in 2001 you ready not five times Not eight times not ten times eleven Times we lowered the rates in 2001. Again it's a very unpredictable climate Today number five great resignation Increase wages people were normally Getting a job for 40 Grand new you have To pay them 65. we're getting a job for A hundred thousand dollars you have to Pay 150 000 it was a strange time when He came down to making job offers the Last year and a half two years Point Number six is population actually move Like physically they moved a lot of People moved out of California first Time since 1851 California's population Went down 330 000 people left New York To other places Chicago Illinois moving To Texas or Florida so whether it was Politics or it was working remote why am I living in New York and paying so much Cost I can work remote at a national Nashville and get paid the salary in New York I'm just gonna move so again we've Not experienced that before so again These six key factors happening at the Same time during a two and a half three Year period is what's causing an anomaly Where nobody can predict the future but There's four different types of Unemployment let's talk about it number One frictional unemployment this has
Nothing to do with the economy this is People are moving from one job to Another job transitioning out from one State to another state so there's a 30 60 90 day window of them not having a Job that's called frictional Unemployment the second type of Unemployment is structural unemployment So for example let's just say we're Having a much I.T here you know Engineers here cost is going up you're Like listen I'm not going to do this Moving forward we're going to hire a Thousand employees out of India you know 500 Engineers from Armenia I'm gonna go Offshore I'm not going to do it here That's structural where those jobs are Lost here right or you know newspaper Industry is a big industry boom online Comes in why do we need newspapers we Don't boom 25 unemployment in a year They're going into different Industries There's a little bit of a structural Unemployment chat gbt restaurants now Don't have fast food they have Automation this is the kind of stuff That causes unemployment to go up but It's purely structural number three is The title will explain it itself it's Called seasonal unemployment which means Christmas Is Here Black Friday is here Let's hire a bunch of different people To work retail but then January 15 we Don't need you anymore summertime New
York hotels super busy we need to are a Bunch we need to work at the hotel boom Season's gone everyone's going back to School it's not here anymore Farmers oh This is our season Hiram boom two months From now we don't need a minute more Seasonal unemployment just happens every Year and last but not least it's the Cyclical unemployment this is a part of Capitalism boom and bust recession kind Of like what we're going through right Now when people are making money they Spend money they go entertain they do All this stuff when the market goes Through its bust they're not spending Money the economy kind of contracts a Little bit that's the cyclical Unemployment so those were the four Different things that cause unemployment But here's a kicker every month the Bureau of Labor Statistics puts out Stats and in the government level and a Lot of Corporations companies there's The one statistics everybody looks Forward to seeing some are concerned Some are enthusiastic about it it's the Unemployment rate when it come comes out Like oh my God rates are good we're good Why many reasons if people are having a Job they're paying the bills crime is Lower re-election for politicians if It's high you're not getting reelected Crime is up a lot of uncertainty people Are not spending money they're not
Investing into different communities It's a very very important indicator but The question becomes well Pat how do They figure out the formula for Unemployment let me share with you their Formula on how to come up with the Unemployment rate here's what it is okay So the U.S employment report is based on Two surveys that they do the first one Is the establishment report which asks a Random sample of employers how many People are on the payroll the second one Is the current population survey also Called the CPS in which approximately Sixty thousand households whether their Family members are working or looking For work okay so don't ask me why it's 60 000 and why they do the way they do It but that's how they get the numbers Now here's a formula they take the Number of unemployed divided by the Total labor force times a hundred okay I'm sure you're having so much fun right And getting all these statistics but as If it's not already complicated there's Six different ways they measure Unemployment you ready let's have some Fun together it's U1 U2 all the way down To U6 here's what it is you won these Are people that are unemployed 15 weeks Or longer you too they have completed Temporary work or recently lost their Jobs u3 which is the one we typically Hear about is the official unemployment
Rate total unemployed as a percentage of The civilian labor force u4 ready the Total unemployed plus the total of Discouraged workers those who have given Up looking for work because they don't Think there are jobs available you five The total of unemployed u3s plus Discouraged workers u-force plus all Those marginally attached to the labor Force those unemployed who would like to Work but have not looked for work Recently and last but not least U6 the Total unemployed u3s plus discouraged Workers u4 plus marginally attached Workers u5 plus part-time or Underemployed workers who want to work Full-time but can because of economic Reasons so now that you know what the U1 U2 u3 U6 is you'll see why u3 is three And a half percent unemployment about U6 Is 7.4 right but but here's the point Why do these things matter historically There's this thing called Phillips curve Philips curve means when inflation is High unemployment is low they're inverse Like directly complete opposite okay When inflation is low unemployment Sometimes can be high so today what has Jerome Powell been doing they increased Interest rates Seven times okay back to back to back to Cause inflation to go down If they cause inflation to go down Unemployment should go up okay so let me
Give you a little bit of context here in History in the 70s both interest rates Were high inflation was high and Unemployment was high that's what you Call stagflation Jimmy Carter era in the 90s both inflation was down and both Unemployment was down that's the last Time we were in a budget surplus during Clinton era when you hear about that That's because the economy was great in The 90s we were managing our finances Properly as a nation today it's a little Weird again those six key factors we Talked about but if everything goes the Way it is the next data you're going to Hear about them talking about Unemployment going to five percent six Percent possibly seven eight percent is Going to be happening by Q3 Q4 maybe q1 Of 2024. again if history repeats itself That's the direction we're gone so what Does this mean to you may say well okay I got data now what do I think about Well if you're an employee yourself and You're sitting here saying what if I get Laid off the market always loves great Employees with great attitudes that go Above and beyond that are experts that Are constantly getting better because It's very very hard to find people like That if that's you you're going to be All right number two if you're an Employer or an entrepreneur business Owner this is going to be a very good
Season to recruit Talent period because As the layoffs take place somebody Getting laid off doesn't mean that is Bad Talent it could simply mean that the Company at the time didn't have the Money to keep them all this means is you Can pick up some great people right now The next three six 12 months in case Unemployment does go up having said that I want you to watch this video I Shot I Think 2018 2019 eight ways to prepare For market crash this is pre-covered Very interesting video if you've never Seen it click here to watch the video And if you got value from today's video Give it a thumbs up and subscribe to the Channel take care everybody bye Foreign
