The Jobs Market Just Sent A Chilling Signal

How will Wall Street spin a number that just hit a level we haven't seen since the worst of COVID lockdowns? By the end of this video, you'll understand exactly why today's consumer confidence print is hiding a labor market tipping point and what it means for your money. At 10 a.m. this morning, Wall Street time, the conference board dropped its June consumer confidence reading, and the headline says it inched up to 91.2. Mainstream press is going to run with a consumer hold steady as gas prices dip. That sounds good enough. And that's the story that you're about to see everywhere today. Problem is, that headline missed the street's own forecast of 94.2. So even the good news came in below expectation. And the second you look past that top line number, the story falls apart completely, as it typically does. My friends, I've been staring at these reports for two decades, and I can tell you the headline number is almost never the number that actually matters. Let's get into it. But before we do, if you like this type of content, please click like and don't forget to subscribe. It's important to be in the know, and this, my friends, is how you do it. All right, let's get back into it. Here is what nobody on the morning shows is going to lead with. The present situation index, which measures how consumers feel about things right now, not six months from now, fell a full three points to 116.4. That's not a rounding error. That is a real deterioration in how people see their current lives. And buried inside that number is the shadow data point that I love that actually matters today. The share of consumers saying jobs are hard to get, that's the quote, spiked to 22.5%. 22.5%. That's right. I said it twice because it's that weird. That is a five and a half year high. Last time it was this bad was January 2021. Remember that? The dead of winter in the middle of pandemic lockdowns when the economy was literally slammed shut. Think about that for just a second, my friends. Consumers right now are telling you the job market feels as hard to crack when it did that it did when the offices were physically closed. All right? And the labor differential, that's the gap between people who say jobs are plentiful versus hard to get, collapsed to just 2.4 percentage points. That spread has been shrinking for months. And it's one of the cleanest early warning signs that this market has ever had on labor. Why does a survey question about feelings actually move markets? Well, because consumers are not guessing. They're reporting what's actually happening to them and their neighbors in real time, weeks before the official government data catches up to it, maybe even months. All right. Here's the part that should really get your attention. The jolts report dropped at the exact same time this morning, and it confirms exactly what consumers are feeling. Job openings came in at 7.6 million for May, essentially unchanged from April. Now, here's the trap. That number actually beat the streets forecast of 7.3 million. So the ticker tape is going to call this a win of sorts. But a beat against a low bar is still a flat line. Openings have been stuck in the same narrow band for months now, and no new hiring demand is getting created. The easy hire market, where companies were fighting each other for workers, is completely gone right now. And when openings go flat at the same moment that hard to get spikes to a five-and-a-half-year high, well, that's not two unrelated data points. That is one story told twice. So let's talk about what this actually means for your money. If you're a long consumer, if you are long consumer discretionary stocks right now based on a headline confidence number that ticked up, well, you're trading the wrong layer of this report. Consumer spending is nearly 70% of GDP. It's really important. And spending does not hold up when people are scared about replacing their paychecks. Confident consumers consume. That's my famous quote. Check it out. It's all over online. The consumers most exposed here, my friends, are the ones without a cash cushion. Lower and middle income households who can't afford a gap between jobs. They're the ones who pull back first on discretionary purchases, on dining out, on anything that is not necessarily essential. Meanwhile, higher income households with bigger savings buffers and equity exposure, they keep spending for longer, which is exactly why the aggregate spending numbers can still look fine right up until the moment that they don't. This is not a recession call. It never is. The expectations index actually rose three points to 74.4, which is good. So consumers are still hopeful about the future, even as they sour on the present. But hope is not a hedge. What you want to watch now is whether this labor anxiety shows up in the hard data, not just the survey data. Keep your eye on continuing jobless claims. We get this once a week. They're the cleanest real-time confirmation of whether people who lose a job are struggling to find a new one. And we also get a fresh read on labor underemployment this Thursday when the June jobs report drops. You don't want to miss that one. That is the broadest measure of slack in this labor market. And it's been sitting near 8%, well above pre-pandemic norms. And that's the number that tells you how many people are working less than they want to, not just who is officially unemployed. We know that is an odd number, because if you're not looking for a job, you're not counted in the unemployment number. So if you just gave up because you're frustrated, guess what? You're not part of that unemployment figure, that top-line figure that the press loves to post. Your truth bomb for today is this. Wall Street is celebrating a microscopic gas price drop, while the people who actually have to go find a job are telling you in real time that the labor market just quietly broke for the first time since the pandemic. Join me every day for Wall Street Truth Bombs, where I drop them right here before the market figures them out.