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Damn! … The economy produced lots of jobs again

Damn! … The economy produced lots of jobs again

The latest Jobs Report showed the addition of 315,000 new jobs in August.  At any other time that would be good news – not great, but pretty good.  Of course, President Biden is taking a victory lap as if it is a really great report – and taking full credit.

But is it really good news?

Probably not – and that is because we do not live in normal times.  We have a major inflation problem – and at the current rate, workers are losing one month of their income to inflation.

Recovering Old Jobs

Undoubtedly, Biden will again point to the fact that there has been a record number of jobs created during his year-and-a-half in office.  What he will not say is that the record numbers are virtually all due to the anticipated return of jobs after the devastating Covid shutdown.  In fact, after Biden’s one-and-a-half years in office, America has not yet reached the pre-Pandemic job levels.  That will take a few more good job reports.

Fueling Inflation

The second mitigating issue with the jobs report is that the good news is actually not-so-good news.  To get the inflation under control, we need to INCREASE the unemployment rate in order to lower the amount of money in the market – reduce consumer spending.  That is what Jerome Powell is doing at the Federal Reserve.  He basically has only one tool to reduce employment and the money in circulation and that is to increase the interest rates – and that means increased unemployment.  There was a slight uptick in unemployment from 3.5 to 3.7 percent.  In this case that is good news – but not enough to make a difference. Probably not enough to impact on the inflation rate since the uptick was largely do to more folks re-entering the work force.  That stay-at-homes are running out of money.

Higher Interest Rates

If we continue to create jobs at this rate, we can expect another BIG leap in the interest rates in the next month or so.  And that would come on the heels of previous large increases.  If the Fed goes too far, it will plunge America into a Recession – and technically it already has, albeit more of sticking our toes in the waters of recession rather than a full plunge.

Increases in the interest rates are not good for the consumers – and especially those in the lower tax brackets.  It means higher mortgage rates for new buyers and those on variable interest mortgages.  It will hit people through their credit cards – which already carry high interest rates and special charges.

Unfilled Jobs

Then there is the issue of who is going to take these new jobs.  We have more job openings than at any time in history – even as more and more folks do not have jobs because they are not looking.  We only need to create more jobs, but we need to have people taking them.

The simple fact is that America has more jobs than we have productive people.  We still have too many consumers and not enough producers – but those consumers and even those non-producers have enough money to keep the fires of inflation burning brightly for now.

Incidentally, the drop in gas prices is good news, but gas is only one of many inflationary pressures. That is why we still see inflation at the grocery store.  We are not yet winning the battle over inflation – and we are not yet out of danger of a recession.

Hurray for the job numbers … arrrrgh for what they mean.

So, there ‘tis.

About The Author

Larry Horist

So,there‘tis… The opinions, perspectives and analyses of Larry Horist Larry Horist is a businessman, conservative writer and political strategist with an extensive background in economics and public policy. Clients of his consulting firm have included such conservative icons as Steve Forbes and Milton Friedman. He has served as a consultant to the Nixon White House and travelled the country as a spokesman for President Reagan’s economic reforms. He has testified as an expert witness before numerous legislative bodies, including the U. S. Congress. Horist has lectured and taught courses at numerous colleges and universities, including Harvard, Northwestern, DePaul universities, Hope College and his alma mater, Knox College. He has been a guest on hundreds of public affairs talk shows, and hosted his own program, “Chicago In Sight,” on WIND radio. Horist was a one-time candidate for mayor of Chicago and served as Executive Director of the City Club of Chicago, where he led a successful two-year campaign to save the historic Chicago Theatre from the wrecking ball. An award-winning debater, his insightful and sometimes controversial commentaries appear frequently on the editorial pages of newspapers across the nation. He is praised by readers for his style, substance and sense of humor. According to one reader, Horist is the “new Charles Krauthammer.” He is actively semi-retired in Boca Raton, Florida where he devotes his time to writing. So, there ‘tis is Horist’s signature sign off.

7 Comments

  1. Frank stetson

    That’s some spin given the fed was already gonna raise rates until employment suffers.

  2. john

    no matter what kind of jobs are created and if you get good money for working bidens taxes will take its toll, with bidenflation you still be bankrupt ! thanks tp biden !!

  3. Frank stetson

    What biden taxes are you seeing? My last tax increase was all Trump by nailing deductions but not getting enough cuts to cover.

    Don’t think Biden has added any taxes to me…..yet

  4. Mike

    Larry, I guess the readers should keep in mind the comments from Faux news lawyers a couple of years ago when Faux was sued for statements that Carlson and others made on their programs “the viewers of those programs cannot believe that they are stating actual facts about the topics they discuss”. Clearly that comment applies to Larry’s opening comments today-“America has not yet reached pre-pandemic job levels” when it was widely reported that “the 315000 gain in August payrolls pushed total employment to 152744 million, which is 240000 more than in February 2020”. But it is unrealistic for Larry to get his facts straight…. So, back to the gist of the article, we don’t seem to have enough workers to fill all those empty positions? I wonder why? Could it be because that former guy reduced all of our immigration while he was in office? Just wondering, but it seems likely…. And of course you say that we are technically in a recession-perhaps you would like to offer your expertise in this matter to Jerome Powell, who has consistently said that we are not in a recession… (perhaps your definition of recession is as out of date as you are Larry?) So there tis, more bad mouthing the current administration, but unfortunately not really saying a thing….

  5. anniedawn

    How many of those jobs went to illegal aliens?

    • Mike

      Annie-Obviously not enough because there are still so many unfilled jobs…..

      • anniedawn

        Don’t worry. Biden will take care of that.