Posted on 01/10/2022 1:01:56 PM PST by blam
The United States December jobs report shows that the labor market remains weak.
The headline 3.9% unemployment rate looks positive, but job creation fell significantly below consensus, at 199,000 in December versus a consensus estimate of 450,000.
The weak jobs figure should be viewed in the context of the largest stimulus plan in recent history. With massive monetary and fiscal support and a government deficit of $2.77 trillion, the second highest on record, job creation falls significantly short of previous recoveries and the employment situation is significantly worse than it was in 2019.
The most alarming datapoint is that real wages are plummeting. Average hourly earnings have risen 4.7% in 2021, but inflation is 6.8%, sending real wages to negative territory and the worst reading since 2011.
The number of persons not in the labor force who currently want a job did not change in December, at 5.7 million. This is still 717,000 higher than in February 2020.
The number of long-term unemployed (those jobless for 27 weeks or more) remains at two million in December, or 887,000 higher than in February 2020. Long-term unemployed accounted for 31.7 percent of unemployed, according to the Bureau of Labor Statistics.
The labor force participation rate remains at 61.9 percent in December and has been stagnant for almost twelve months. Labor participation remains 1.5 percentage points lower than in February 2020. Finally, the employment-to-population ratio is just 59.5 percent, or 1.7 percentage points below the February 2020 level.
Now put this in the context of a massive three trillion-dollar stimulus and the evidence is clear. There is no bang-on-the-buck from this unprecedented spending spree. All the jobs recovery comes from the re-opening. The stimulus plan has not accelerated job growth, it has slowed it.
A few months ago I had a conversation with Judy Shelton, one of the top economists in the United States, and she mentioned that the recovery would be stronger without this stimulus plan, and she has been proven right.
No US citizen should be happy about plummeting real wages and stagnant labor participation in the middle of a strong recovery and the second-largest deficit on record.
The unprecedented figure of resignations is not a positive. It is the evidence of a broken labor market where hundreds of thousands of Americans cannot afford to go to work because the costs outweigh their salary. This is not a signal of strong employment; it is a signal of a genuinely concerning side effect of inflation.
The United States is not even close to full employment. Erasing people from the unemployment lists is not full employment.
There is a clear threat to American workers from persistent high inflation and the higher taxes that the massive deficit includes. The destruction of the middle class and fewer job opportunities in the future as small and medium enterprises, the largest employers in the United States, suffer rising input prices and weaker margins.
The United States will not have a strong job market unless it recovers the trend of rising real wages and increasing labor participation rate that existed in 2018-2019. Everything else is just a poor and unproductive bounce.
Let’s go Brandon...
...... Just as predicted would happen.
You can only lie to people so long.
The truth will out.
I will be 65 in 2 weeks and have two businesses. The reward vs pain has flipped to the pain side, and I may just ride off into the sunset. All the normal BS of having a business along with Covid is no longer fun. My house is paid and have few bills. I have to believe there are many in the same situation.
What recovery? I hadn’t noticed.
Retire and do things you wanted to enjoy but never found time to do. I retired at age 57 and it was one of the best decisions ever. Now nearing age 82, I am still healthy and happy.
Best news is if house is paid for and no big loans, it is surprisingly cheap to live in retirement.
“Recovery?”. From what, lockdowns?
Inflation, supply shortages, unsecured borders, pandemic fear mongering, etc. all do to Brandon’s and democrat’s policies.
Change my mind.
5.56mm
THE RED QUEEN EFFECT
From Alice in Wonderland where the Red Queen ran upon a turntable. She cried, “I must run harder and harder just to stay in the same place!”
Now, Americans are running harder and harder just to fall further and further behind.
They can't help being the scummy, intellectually vapid, hateful, narcissistic, bald-faced liars that they are. When the standards for the media, academics, and politics became substantially lower than the mediocrity that already defined them, they unfortunately pulled much of society with them into the muck in which these bottom feeders dwell.
We are truly living during the dark ages of what used to be a free nation.
I agree with all that you say. I retired at 50, I'm 78 now...still healthy and happy.
“...I may just ride off into the sunset...”
Is that you, John?
COVID, suffocating government regulations, supply chain issues, labor problems, wokeism, surging inflation, tax complexity, etc. That’s a lot to put up with. Just saying.
Now, Americans are running harder and harder just to fall further and further behind.
*************
But you should be thankful to live in such a progressive, socialist paradise.
What ‘recovery’ are they exactly referring to?
I see nothing but bubbles waiting to pop along with inflation and shortages.......
Soon people will say...”I’m a Millionaire!”
“But you cannot buy more now than when when you only had a hundred dollars!”
“Yeah, but I’M A MILLIONAIRE!”
I retired early at 62 ....never looked back. Best decision I made. No bills and fully debt free. Another family member transferred to Independent Contractor but still remained with the company as that. Lots of ways to have your cake and eat it too.
You are one smart dude to see the reality of life.
For years some have insisted the only way to advance is to switch jobs frequently (every few years); many ignored that advise for their own reasons (some valid), but at this point just about every worker can see he/she is working for less REAL COMPENSATION than before.
I believe THAT is what is driving the “mass resignation”; people aren’t necessarily leaving work - they are changing jobs in an attempt to keep up with the unreported/underreported inflation. One of my children (a student) switched jobs about a year ago as the labor market tightened in in NJ; our minimum wage is now $13/hour and employers offering low-skill jobs can’t fill then. He found something paying $18, and is now looking to switch again because even easier jobs are offering more (and he has the luxury of living at home with few bills; he does contribute).
Anyone who believes illegals will fill this gap is wrong; they are demanding in their wages as well, often getting $10/hour for physical jobs back when our minimum wage was $8.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.