
<p class="wp-block-paragraph">The job report for July was amazing. ; More than 528,000 jobs were created – double the anticipation of the leading economists. Unemployment dropped to 3.5 percent – a fifty-year low. ; This is in the range that economists consider full employment. ; There is no such thing as zero unemployment.</p>



<p class="wp-block-paragraph">In any other environment, that would be unmitigated good news. ; But the United States is in a very weird place – economically speaking. ; Inflation is the number one problem. ; It destroys the purchasing power of every American.</p>



<p class="wp-block-paragraph">The trend toward increasing wage levels is generally viewed as good news. ; Unfortunately, those gains &#8212; for those who got them – are more than wiped out by the loss of purchasing power. ; On average, Americans are poorer today than they were yesterday.</p>



<p class="wp-block-paragraph">While the United States slumped into a recession by definition – two-quarters of negative growth – the latest jobs report suggests that it may have been a brief technical dip. ; America could be back to positive growth in the current quarter. ; Have to wait and see.</p>



<p class="wp-block-paragraph">The drop in the unemployment rate is generally good news, but there are unique circumstances that may be accounting for it. ; We may be looking at apples and oranges if we are comparing pre-Pandemic unemployment levels with the post-Pandemic numbers.  ; There are two unique factors. ; First is the unprecedented number of individuals who have stopped looking for jobs. ; That lowers the unemployment rate. ; It is not because people are taking jobs. ; ;</p>



<p class="wp-block-paragraph">That is especially true when you look at the unprecedented number of job openings that are going unfilled. ; While we have low unemployment numbers, the nation is not as fully employed as the numbers suggest. ; That means a greater number of people who are unable – or unwilling – to work. ; And unfortunately, that means more financial welfare for non-producing consumers – and a greater burden and higher taxes on the producer/consumer folks.</p>



<p class="wp-block-paragraph">Then there is the problem of inflation. ; Jerome Powell and the folks at the Federal Reserve Bank are not doing their happy dance over the new job creation figures. ; No. ; No. ; No. ; They know it means more inflation. ; And they have been trying very hard to INCREASE unemployment to rein in the inflation.</p>



<p class="wp-block-paragraph">The very large job creation number is exactly what they do not want to see. ; The Fed has been aggressively increasing the cost of credit to do two things to put the brakes on inflation – slow down consumer buying by shrinking the money supply and increasing the unemployment rate. ; All those new workers, however, will now have more money to spend – and that means price increases (inflation). ; It also means paying more to use those credit cards or to purchase big-ticket items, such as homes and cars.</p>



<p class="wp-block-paragraph">It also means that the Fed is going to have to raise credit rates again – and significantly. ; If they overdo it, however, the nation will be thrown into a serious recession – and one bad enough that no one can re-define it for political purposes. ; But so far, the Fed has been too little, too late. ; The Fed’s failure to cool the economy earlier, the Biden spending and the war in Ukraine have all contributed to the current inflation.</p>



<p class="wp-block-paragraph">The job and unemployment numbers are not good for the stock market – and millions of Americans will see the value of their investments and pension funds decline over the next period. ;</p>



<p class="wp-block-paragraph">The very small percentage of Americans who took jobs or experienced nice pay increases are the winners. ; But that vast – I mean VAST &#8212; majority of Americans are getting kicked in the keister by the inflation.  ; The jobs report and the unemployment rate do nothing but exacerbate the situation.</p>



<p class="wp-block-paragraph">It will take a while for the experts to determine why they were so wrong in predicting a job creation number half of what was announced. ; The number could be revised downward later – and this number suggests that the previous jobs report could be revised upward in the near future. ; It is very common to have revisions – although they do not typically get the same level of media attention as the initial reports.</p>



<p class="wp-block-paragraph">Politically, the current report is good news for Biden and Democrats. ; It may help in the poll numbers – and possibly in the voting booth. But that is because they know the general public will not see the big picture. ; In life – and especially in politics – perception is reality.</p>



<p class="wp-block-paragraph">We have to wait to see what the Fed does next and where inflation goes in the next few months.</p>



<p class="wp-block-paragraph">So. There ‘tis.</p>

Job creation good news for Biden … bad news for consumers
