Larry Horist | Nov 18, 2022 | 52
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.