Chart of the Week: Misleading Job Growth Numbers

This week, Sean investigates reports of US job growth in recent months – reports that the Biden administration is touting as evidence of the success of “Bidenomics,”and a surprising number of economic commentators and market analysts are quoting as fact.

Of course, this runs contrary to the experience most Americans are having every time it comes to paying a bill or checking their bank balance. I’m grateful to Sean for helping me understand the reality that belies the headlines. – MF

The White House has entered full campaign mode. Central to its messaging has been the state of the economy.

Just look at the steady job growth in recent months, the White House says.

This “growth” has naturally caused the unemployment rate to stay steady below 4%.

But a little bit of sanding removes some of the gilding around these claims.

Really there are two problems with the data: These job growth numbers are misleading, and the unemployment numbers are misleading.

I will talk about how misleading the unemployment numbers are next week.

In the meantime, here’s what the recent job numbers are hiding…

The US is actually hemorrhaging full-time jobs. Over 1.6 million have been lost in the last 3 months.

At the same time, part-time work has been climbing steadily.

And who’s been hiring people?

The sectors adding the most employees are health care, government, and leisure & hospitality.

Take away jobs that are either in government or dominated by the government (health care), and year-over-year job growth is actually negative.

It’s pretty easy to unfold the ramifications of all this data:

* Many of the jobs being created are the product of unsustainable deficit spending.

* At the same time, the part-time jobs being added offer folks fewer hours.

* Fewer hours means less pay.

* Less pay means there’s less wealth circulating among the biggest group of buyers and consumers in the economy.

* Less consumption means less economic activity.

* Less economic activity leads to slower growth or negative growth.

If these trends continue, we are absolutely moving toward a recession.

So I see nothing very little worth celebrating in the Biden administration’s recent press releases about the strength of the US job market.

– Sean MacIntyre

Sean is currently working on a longer video, diving into the details of the current employment situation in the US. Click here and subscribe to his YouTube channel so you don’t miss it.