The Economy Is Questionable At Best

I love it when a Democrat is in power–when unemployment rises it is always a surprise–even at Fox News.

On November 3rd, Fox News posted an article about the current state of the American economy.

The article reports:

U.S. job growth slowed more than expected in October, a sign the labor market is finally softening in the face of higher interest rates, stubborn inflation and other economic uncertainties.

Employers added 150,000 jobs in October, the Labor Department said in its monthly payroll report released Friday, missing the 180,000 jobs forecast by Refinitiv economists.

The unemployment rate, meanwhile, unexpectedly ticked up to 3.9% — the highest level in nearly two years. The pickup in the jobless rate suggests that layoffs are on the rise; the survey of households shows that the number of workers laid off rose in October by 92,000 from the previous month.

The unemployment number of 3.9% is not really a good measure of the economy unless it is looked at in relation to the workforce participation rate, currently slightly down at 62.7. Just to give some perspective, the workforce participation rate was 62.8% when President Trump took office in January 2017. It peaked at 63.3 in February 2020 (the ‘stop the spread’ shutdown began in March 2020). The reported unemployment rate is calculated only counting people who are looking for jobs. I suspect that if you counted everyone who is able to work but not working, the number would be much higher.

The article also notes:

The report also contained steep downward revisions to job growth at the end of the summer. Gains for August and September were revised down by a total of 101,000 jobs to a respective 165,000 and 297,000, the government said, suggesting that the labor market is weaker than it previously appeared.

The bottom line here is that the economy is not really growing although inflation is. For further details, please follow the link above to read the entire article.

 

Looking Behind The Numbers

On Wednesday, Breitbart posted an article about some of the recent employment numbers.

The article reports:

President Joe Biden’s administration is growing the United States labor market by adding millions of foreign workers for employers to hire, leaving jobless Americans on the sidelines.

Data published in the New York Times shows that the Biden administration is aiding employers by adding millions of foreign workers to the labor force — ensuring wages stay stagnant — even as native-born Americans struggle to get back into jobs since the Chinese coronavirus pandemic.

“The foreign-born workforce grew much more quickly than the U.S.-born workforce, Labor Department figures show,” the Times reports:

When the unemployment rate goes down, you would normally expect wage inflation to go up, but that’s not what’s happening,” said Torsten Slok, chief economist at Apollo Global Management. “So there must be something else moving in the labor force, and there is a very likely explanation here that immigrants are coming in and taking jobs.” [Emphasis added]

But despite the resurgence in the foreign-born labor force — about four-fifths of it are people legally allowed to work in the United States, by one calculation — there are bottlenecks. [Emphasis added]

The article includes the following charts:

The article notes:

By focusing on adding foreign workers to the labor market, the Biden administration is ignoring efforts to get native-born Americans back into the workforce. The administration’s foreign competition addition to the labor force adds tremendous weight for the nation’s working and lower-middle class looking to find high-paying jobs with decent benefits packages.

The is the place where the uni-party is revealed. The Democrats want future voters; the country club Republican (the Chamber of Commerce party) want cheap labor for their corporate allies. No one is looking out for the middle class right now. The influx of foreign workers, both legal and illegal, creates downward pressure on wages. Corporations are out to make a profit, and many of those corporations have forgotten their scruples. Meanwhile, the Biden administration is destroying the middle class. Remember, a strong middle class is necessary for the survival and growth of our republic.

 

The Predictable Truth

The White House and the media have worked very hard to sell the idea that the economy is in good shape and that inflation really isn’t that bad; and if it is that bad, it’s because the economy is growing. They have also attempted to convince Americans that the supply line crisis is due to Covid. Hopefully Americans are waking up to the fact that neither one of those things is true.

On Wednesday, The Conservative Treehouse posted an article that provides a much more honest assessment of where the American economy actually is. It is a rather long article, so I suggest that you follow the link and read the entire article. I will try to summarize some of the major points.

The article reports:

The business and financial wires are melting down today as ADP Payrolls, the nation’s largest private sector payroll providing service, releases data from January showing a drop of 301,000 jobs.  [ADP Raw Data Here]

The financial, economic and business pundits are completely caught off guard and using the words “shocked”, “unexpected” and “surprised,” within their analysis.  These employment numbers just don’t align with an economy growing at 6.9%, as measured by the Bureau of Economic Analysis (BEA).  However, for CTH readers who have carefully scrutinized the economic claims and looked at the bigger picture through the prism of kitchen table checkbook economics, these results are not a surprise.

Every sector of the employment picture on Main Street USA is hit.  The pundits, following the narrative first seeded by the White House on Monday, are pointing to Omicron as the justification inside their review.  That’s nonsense.  For the better part of seven months these same pundits first claimed Delta, then shifted to Omicron as a way to explain the structurally weak economy.  All of that is nonsense.

What we are witnessing are the outcomes of massive inflation now hitting the labor market.  A drop in demand, and a subsequent drop in the employment of goods and services, is an unavoidable outcome of inflationary pressure on wages.

Let me say it again, on a macro level, natural consumer DEMAND has dropped – we are only now starting to see it surfacing in the statistical measures.

This is why White House spokesperson Jen Psaki made that weird statement on Monday.

The article concludes:

We are in the inflation hurricane right now.

The good news is… if domestic demand continues naturally contracting, due to unsustainable inflation, eventually prices will have to stabilize. It seems counterintuitive, but a strong cash position is valuable despite inflation right now.

Inflation will continue hitting wages hard, but there is light at the end of the tunnel. If you have prepared to ride out this storm of inflation, we should see things start to turn around in about six months. Unfortunately, between now and then, there will be significant job losses as inventories continue to build and sales get stagnant.

Prices on fast turn consumable goods like food, fuel, energy etc. will never return to their pre-inflationary price. The high prices on highly consumable products are here to stay and will never decline. Unfortunately, there are several indicators that those prices will go even higher throughout the next six months until they plateau mid-summer.

However, on the backside of this inflationary hurricane, the prices on long-term durable goods will start dropping sooner as consumer demand continues to focus on prioritization of spending and employment becomes more tenuous.

Please read the entire article. It includes a couple of charts that illustrate exactly what is happening to our economy under the economic policies of the Biden administration.