Illegal Immigration is Stealing Jobs and Crashing Wages – Straight From the Jobs Report

Transcript of Taking Back Trump's America Podcast 3.10.23

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Hi. I’m Peter Navarro, and it’s Friday morning just a few hours after the latest jobs report came out and sent yet more ripples through both the stock and bond markets. I will parse those numbers for you in this podcast as well as assess that emerging crisis and contagion in the global banking system that has, in part, been catalyzed by a collapse of the stock price of Silicon Valley Bank. And please note, that if you would like a transcript of this podcast, as well as other premium analysis, please go to PeterNavarro.substack.com.

Okay. Let’s start off this podcast with this riddle: How can you have a robust rise well above expectations of monthly new jobs AKA nonfarm payrolls and still see both a rise in the unemployment rate and a slowing of monthly wage growth? To any economist, this trifecta doesn’t make a lot of sense.

You would think that if nonfarm payrolls are growing robustly – in fact, they have beaten expectations for the last 11 months, which is a record – that the unemployment rate would fall and wage growth would increase.  But that’s not what’s happening in the United States of America; and the reason is as simple as the answer to this riddle – illegal immigration.

I’m not talking about just illegal immigration but rather a flood, nay, an invasion of illegal immigrants streaming by the thousands every day across our Southern border.  These poorly educated illegals with little English skills are overwhelming particularly our low-end labor markets and driving down the wages of black, brown, and blue-collar Americans.

In a previous jobs report – and I was surprised that they dared to even print these numbers – the government freely acknowledged that around a million new entrants into the workforce have been illegal aliens.  And that is old data.

We have had over two million illegals flood our borders each year – that’s a total of more than four million – since Joe Biden reversed Donald Trump’s secure borders policy. My guess now is that at this point the true number of illegals fresh across the border in our workforce is approaching 2 million.

Folks like me and Steve Bannon and Steve Cortes on Bannon’s War Room had been warning for over a year – yes, over a year – that this flood of illegal immigrants would indeed exert significant downward pressures on the wage growth of Americans, and hit American Deplorables in the mid to lower end of our income stream particularly hard.

Yes, I’m not talking about the Wall Street hedge fund managers, big corporations, and fat cats who are getting rich off this flood of illegal immigration. I’m talking about the heart and soul of this country getting hammered by this crap.

Did I mention that Federal Reserve Chairman Jerome Powell himself has credited immigration – although he consciously left off the word illegal – with helping to control wage inflation.

Remember here that the whole strategy now of the Biden regime to control inflation is not to fix our supply chains, reboot our oil and gas sector, and roll back the Democrats reckless spending – the obvious structural solutions that Trump would be embracing. 

Rather, it is to cheer Federal Reserve Chairman Jerome Powell on as he raises interest rates, triggers a deep recession, puts people on the unemployment line, and causes wages to fall. Yes, the Deplorables always take it in the shorts while the fat cats short the market and make money either way.

To finish up this rant – and yes I’m a little worked up about this whole situation – let me at least give you the numbers: the US economy added 311,000 jobs, which was about 50% higher than expectations, and yes, this was the 11^th month in a row where the number exceeded expectations.

Average hourly earnings rose 0.2% and 4.6% from the previous 12 months, which was the slowest pace this  year and well below the inflation rate, meaning that real, inflation-adjusted wages continue to fall for much of Deplorable America.

In a nutshell, jobs are up, wage growth is down; and what this means for Federal Reserve policy is this: The consensus seems to be that the continued strength in the job market will pave the way for Powell to go to his Full Monty on 50 basis point rate hikes, starting with the next Fed meeting this month.

Let’s turn now to the growing bank contagion that has been triggered by a plunge in the stock price of Silicon Valley Bank. This contagion has spread most directly to First Republic Bank, which is undergoing a similar unraveling; and US bank stocks more broadly have seen their largest drop since 2020.

But, depending on a bank size, a similar kind of contagion is in the air. One analyst reports that smaller banks like PacWest Bancorp and Signature Bank are down around 20% while the contagion is spreading to big boys like Goldman Sachs and Citigroup as well.

Predictably, some of the touts on Wall Street are trying to describe the problems of Silicon Valley Bank and First Republic Bank as outliers – both have a heavy exposure to venture capitol.

This ignores that the contagion is interest rate and inflation rate-related and spreading like wildfire in Europe as well.  Indeed, European bank stocks, which have been plunging, fell almost 4% today as US markets were opening.

You can trace this contagion to the heavy weight that is a stagflation scenario – simultaneous inflation and recession.  Put simply, stagflation does indeed place a heavy burden on the banking system.

During a recession, there is simply far less dealmaking and investments in the corporate sector to finance while consumers are financing for fewer big-ticket items like autos and housing.

Meanwhile, in an era of rising interest rates or interest rate volatility, you literally have to be a rocket scientist at a bank to correctly juggle rates across the short, midterm, and long end of the yield curve in order to make sure you can still make a buck; and a lot of banks simply do not have the talent to pull that feat off and they get picked clean by more sophisticated bond traders.

On top of this, bank depositors are demanding higher interest rates on their deposits, further eroding bank margins.

As for how this all ends, we need only go back to the days of the 2007-2008 crash to know that it could end very badly.  Stay tuned.

At the end of the day, we must be reminded that this is a Joe Biden-politician-made disaster aided and abetted by clowns like Jay Powell at the Fed and hypocrites like Democrat Senator Elizabeth Warren who have lit the inflation match with profligate spending from Congress even as Pocahontas criticizes Powell himself for putting people out of work.

Right now, there is an ongoing battle between bulls and bears on Wall Street; and as many of you know if you regularly listen to this podcast, I have bet on the bearish side.

Remember here that I’m not a financial advisor this is not my advice; I’m simply an economist. But the bet I’m making now with my own dough is simply that there are harder rather than easier times ahead, and the financial markets must reflect that. Peter Navarro.  Out.