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Jobs report shows economy is strong and still floundering

Jobs report shows economy is strong and still floundering

More than ever, it seems the American economy is a cross current of good news and bad news.  At the top of the news is the monthly Jobs Report.  In September, America added 263,000 new jobs.  That was in the range of expectation (good news) but lower than previous months (bad news).

The economy is more than jobs – and there is where a deeper dive into the statistics is required.

The recent report shows an increase of 5 percent in wages (good news).  Unfortunately, the 8 percent inflation rate means the purchasing power of the new income has dropped and folks are going deeper into the economic hole (bad news).

The second most publicized number is the unemployment figure.  It dropped to 3.5 percent (good news) – but that was because more than 50,000 folks stopped looking (bad news).  That merely means that they are no longer on the unemployment compensation rolls.

And even the drop in the unemployment rate is a double-edged sword because it means folks will have more money to spend – fueling the inflation (bad news).

Once again the Federal Reserve will have to impose a major increase in interest rates to bring down the run-away inflation (good news, if it works) – but that means added expenses for all those who need to borrow money for homes, cars, and credit purchases (bad news).  

When the Fed looks at the drop in the unemployment rate, what do they see?  (Bad news.)  Increasing interest rates is supposed to reduce spendable incomes.  Less money, lower inflation (good news).  That requires an INCREASE in unemployment since folks without jobs have less money to spend (bad news, for them).

Even as we have low unemployment and millions of potential workers (good news), we have a high percentage of eligible workers who simply do not want to work.  Largely, they are living off some sort of government assistance.  They are not only NOT producing wealth and taxes, but they are also adding to the burden on the productive taxpayer. In other words, Uncle Sam is competing with the private sector – and winning. (Very bad news).

Reducing the rate of inflation (good news) has an economic side effect.  It can – and likely will – drive America into a recession (bad news).  Almost half the folks who could be working are not.

The stock market had been soaring to record highs (good news, for investors and retirees).  But economic instability and increases in interest rates have created a Bear Market (bad news, for job creation and pension plans).  Major investors will do okay because they will switch to the bond markets.

In terms of oil prices, it is all bad news.  The Biden administration continues its war on fossil fuels – meaning there will be no increases in production sufficient to meet the American demand.  OPEC+ has reduced production – guaranteeing higher prices and more money for Putin to wage his war (bad news).

That shows how badly Biden’s fist bump with Prince Mohammed bin Salman failed to win favor from Saudi Arabia – the driving force in OPEC+.  Now Biden is going hat-in-hand to two avowed enemies – Iran and Venezuela – to beg for oil.  And you know that will require concessions on our part.

The entire oil situation is bad, bad, bad news – and largely due to Biden’s incredibly bad green energy policies.  Less than two years ago, America was producing more gas and oil than we could use (great news).  But a broad range of so-called green energy programs ended that – and we now must import very expensive low-quality oil from unfriendly nations (very bad news).

So, when you put all the pieces together, America has a strong economy – among the strongest on earth – based on job creation, low unemployment, and the willingness of the people to spend … spend … spend.

Despite that, the economy is generally bad news for the American people.  The lack of workers and supply-chain shortages will continue to create problems for businesses (ergo consumers) and the rising prices will cut into the family budgets for the foreseeable future. 

Ponder this.  For the first time in American history, 30-year-old Americans are worse off than we were at that age.  And we older folks are not as well off as our parents at this age.  Next time you hear Biden bragging about HIS wonderful economy, remember that it may be good for him politically, but it is not so good for you and me – and especially our children, 

So, there ‘tis.

About The Author

Larry Horist

So,there‘tis… The opinions, perspectives and analyses of Larry HoristLarry 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.

8 Comments

  1. Gerald Ladd

    This is a joke, at best. Biden has fucked up EVERYTHING he has touched, and it’s still just the beginning.

  2. Rat Wrangler

    Comparing what I could do with the American dollar back in the early 1970s, after graduating from high school and serving in the US military during a rather tumultuous time in our history to what a high school graduate can do with it, it’s pretty obvious that our government has no idea how to calculate real inflation. More decent jobs require degrees now than they did in the 1970s, and college is ridiculously expensive now, or all wages are way too low. In 1970, I could have worked for about 246 hours at minimum wage and my gross income would have paid for a year of college at a state university. I had to work a bit longer to offset taxes and such, but many of my friends and I worked a summer for enough to cover our tuition and fees. Today, the high school graduate would have to work about 1,457 hours to do the same thing, or minimum wages would have to be $43 an hour. A median American, prior to 1970, could get married, buy a car, a home, and raise 2.3 children on one income, leaving a parent at home to raise the children. Now, the median American can get married, buy a car, and may not be able to afford a home on both incomes, much less raise children. If our government would cover all the necessary costs to be successful now, prices of essentials, such as housing, college, and medical expenses, would either have to be much lower, or wages would have to be much higher. The 1% wealthiest in our nation held about 8% of the country’s total riches. As of 2019, they held over 42%, and our government doesn’t seem to notice, or care.

    • larry Horist

      Rat Wrangleer … you are correct that the official inflation calculation does not show the full impact on the average person. The inflation of basic need goods is running at about 14 percent. That is the inflation that the public sees every day when they go shopping..

    • frank stetson

      Rat: Did you ever make it to college on the GI Bill or other GI benefit? My father, WII era, did and that’s what broke us out of our family’s life in the coal mines, factories, and train stations to join America’s middle-management class. The rest of his family took another generation to do so, but did so based on my father’s example.

      I too, was in your era, chose state school, worked in a small firm for half a decade, jumped to fortune 100, they paid for another couple degrees, and my family easily surpassed our parents in fame n fortune. This was also in the time of raging inflation, Japanese taking over our factories, economy, etc. I remember getting a bluebird bonus, putting in the bank on a 15% CD but only a year duration because I thought I needed to be liquid, just in case. OMG —- 15% and I short-sheeted it! Thus started my desire to understand finance a little better……. I figured 15% was natural. But I learned, and I focused, and I upped my education with advanced degrees even.

      Yeah, the statisticians said we would never surpass The Greatest Generation, on average. May be true, but in our case, we just had to work harder, and smarter, to get there. The educational tools helped that.

      Yes, it’s harder today, but the American dream is still achievable, even on a High School, or less, diploma. It’s just statistically easier with a two-year, four-year, advanced degrees in that order of risk/reward. I would love to see minimum wage increased, so other wages would increase as well to make this easier for those entering the workforce to succeed.

  3. mike

    numbers don’t tell the facts! how many people changed jobs where one filled one job vacating another

  4. frank stetson

    ” For the first time in American history, Americans are worse off than we were at that age. And we older folks are not as well off as our parents at this age.” Not with disbelief, but do you have sources? Good story, something we should all consider.

    Here’s mine: ” For the first time in American history, 30-year-old Americans are worse off than we were at that age. And we older folks are not as well off as our parents at this age.” https://www.cnn.com/2020/01/11/politics/millennials-income-stalled-upward-mobility-us/index.html

    My point is I swear we were reading the same thing about our parents in the 70’s and 80’s. Like all the “hold the line” articles on the bear market that crop up about now, it’s a mainstay of the MSM diet. It all may be true, but obviously not everyone. I would daresay you, and Joe, both exceeded your parents financial well-being. Joe, a government drone, did OK. And you , a political hack (just kidding), did OK too I am guessing. Unfortunately, for Joe/Larry being above the curve means someone else is below the average.

    Me too on surpassing Mom and Dad, although I guarantee I put in more hours than Dad and Mom. Plus, my Mom quit work, returned in her 40’s (I am so proud of getting her her first next job), whereas both my wife and I had similar careers, had to, to make it work. Then again, we had nannies, housekeepers, lawn-keepers, etc. which my parents could never afford. We also had iPods, cell phones, and many other neat things my parents never had.

    I could blame America in our case, but frankly the Japanese were willing to work harder for less, so really we had little choice IF we wanted to get ahead. Since I worked a lot with the Japanese, I had a first hand look on what they did to produce results; it was inspiring. I am pretty sure my kids will have to work more for less too so I continue to stress how working smart is as important as working hard.

    Remember Larry this truth: wherever you are in the economy, you have never been here before. More true today than yesterday as we continue through the invisible recession with the Fed putting on more brakes with each meeting. I think Hoover is watching, hoping, they will reach a bridge too far, a rate too high so that his legacy will finally be eclipsed. I mean Trump let him off the GDP growth debacle, now he’s hoping they will reduce the money supply into a full scale depression. I think not, but once again: wherever you are in the economy today, you have never been here before in the past.

  5. Bobm

    Before I get to my ,main point, a comment to Frank Stetson: Frank: CNN as a source?!?!? Really? Puh-leese.

    Now the main issue:

    There is no way on God’s Green Earth the Administration can NOT know that what they are doing will have the effects it is having across all sectors. You print more money so you can spend more money and prices will go up. And you get Inflation. The economy of all developed countries run on energy. Period. The cost of energy goes up, the cost of everything goes up. And you get Inflation.

    As for the former, if we were in a recession, one could argue for government stimulus. We weren’t.

    As for the latter, it’s all futures driven. If the markets THINK there’ll be less supply, the price will go up. And vice versa. Biden & Co. sent a very clear message as to what he thinks should happen to fossil fuels.

    They. Know. What. They. Are. Doing. And. What. It. Will. Do.

    So the question is, “Why?” Why are they doing this? What is their intent. And I, for one, do NOT think it is in this country’s best interests.

  6. frank stetson

    Point taken on CNN but if you actually read the article, it is mostly reading out data from economic experts, you can take it for what it’s worth — or fuhgit about it, as you no doubt have. After all, they agreed with Larry, they must be crazy :>:)

    But I can understand you dismissing it.