The Bureau of Labor Statistics released the July jobs report last week which showed an increase of 528,000 jobs from June with the unemployment rate dropping to 3.5%, matching the nation’s lowest level in the past fifty years. Immediately, President*Biden boasted, “More people are working than at any point in American history. That is no accident, it’s results.”
Except, of course, that the figures are vastly misleading. First of all, the reported unemployment rate “matches,” but does not exceed the lowest level in the past fifty years. Furthermore, there are currently more people living in the United States than there were in the past, thus, it is not surprising to have more people working now than at any time in American history.
But Biden’s usual inaccurate remarks aside, let’s look at the true state of the economy that the numbers stated above do not mention. That 3.5% unemployment number looks really good until you realize that it counts only those who are actively seeking employment. Despite the rosy labor numbers, the labor force participation is still below pre-pandemic levels. There are also 5.9 million Americans not in the labor force who currently want a job but are not even counted in the unemployment rate —worse now than before the pandemic. Another 2.2 million Americans are still unable to work because their employer closed his business or had to reduce staff because of the pandemic.
Fox News host Charles Payne took a closer look at the July labor report and pointed out a number of troubling problems. Of those jobs created, there were 71,000 fewer full-time jobs while part-time employment rose by 384,000 as retired people were forced back to work or workers were forced to take second jobs to make ends meet. In fact, 433,000 Americans worked two full-time jobs in July. In addition, 68,000 fewer blacks were employed, and the number of self-employed Americans dropped by 279,000. Altogether, 100,051,000 Americans, nearly a third of our population, were not in the workforce at all in July, an increase of 239,000 from June!
But beyond the actual workforce, other indicators reflect the health of our economy. With negative growth for two quarters and 9.1% inflation in June, we are, despite the attempts of the administration to change definitions, in the midst of a recession. And the Senate Democrats just passed a bill which they laughingly call the “Inflation Reduction Act,” which, according to the Penn Wharton Budget Model will do nothing to reduce inflation, and according to the Congressional Budget Office will drive the cost of prescription drugs to go up. Economist and professor at Johns Hopkins University, Steve H. Hanke, says the bill is “ill-conceived” and will raise taxes for years to come. Public sentiment about the bill is also negative. A YouGov poll found just 12% of Americans believed the bill would reduce inflation.
In addition, we still suffer from supply chain problems. Our 2022 car which we took possession of in February still awaits chips for its heated seats and some safety back-up features for which we, in the meantime, are paying. Other vehicles, according to our salesman, may sit back-logged in yards among thousands of others for weeks, waiting for trucks to deliver them, often only a two or three hour drive away to a dealership. There is a recall on a small bushing on our other car. We are on a list with 70 other customers who will be called when the bushings finally arrive so the 20-minute installation can take place. So, we wait, and wait, and wait.
Tampons, sanitary napkins, baby formula, are still sometimes hard to find. Other items will disappear from store shelves for weeks before suddenly reappearing. You never know if what you want or need will be on the shelf or not. Gas prices may be lower, but they are still considerably higher than they were before Biden took office. We prepay our propane on contract for the winter, and last summer it cost us a thousand dollars more than the summer before. This summer it was up yet another thousand dollars! Food, every food item, seems to go up from one week to another.
Part of the supply problem now is lack of consumer demand. Since prices have gone up so much, people are far more careful of what they buy. Because of inflation, real weekly earnings have fallen by 5.6% since the end of 2020. Brownstone Institute President Jeffrey A. Tucker, finds this extremely troubling. He said, “We are living through the longest consecutive month-by-month decline in real personal disposable income since 1959, and it is combined with a most recent 16% increase debt service as a percent of that same income stream. Translation: dramatic moves toward personal impoverishment.”
This is causing major changes in the way Americans live. 56% are delaying making major purchases and 61% are worried about their savings. After recording the lowest confidence rating in a decade in June, in July, the Consumer Confidence Index fell again to 97.5%. Interest rates are rising on credit card debt at a time when consumers are being forced into using more credit cards, `and higher interest rates are also causing a decline of 17.4% in new home sales from last year. Rents are also on the rise.
528,000 new jobs created in July? 3.5% unemployment rate? It sounds good, but it is just a façade. Look behind the curtain and the Wizard of Oz is just a little old man with smoke and mirrors!