Commentary
Is there more to the monthly Bureau of Labor Statistics jobs report than meets the eye?
Consider: In a Christmas news dump that Americans mostly missed, the Federal Reserve Bank of Philadelphia revised down the BLS’s estimated job growth for the second quarter of 2022 by more than one million. The BLS calculated that 1,121,500 jobs were created over this period, while the Philly Fed found that the economy added just 10,500 jobs. Reuters
called this massive labor market discrepancy “a conundrum.” Sen. Rick Scott (R-Fla.)
accused the BLS of cooking the books to boost Biden.
I’m reminded of these divergent analyses with Feb. 3rd blockbuster BLS jobs
report concluding 517,000 jobs were created in January, drubbing the 188,000 expectation. How did the economy create one of its highest numbers of monthly new jobs over the last couple of years at the same time tech companies were shedding tens of thousands of positions, corporations were paring their holiday workforces, and small businesses continued to struggle with historic inflation?
According to a new
report by employment firm Challenger, Gray & Christmas, more than 100,000 employees were laid off in January, about four times more than last year’s monthly average. Based on what I’m hearing from small businesses across the country, I wouldn’t be surprised if there’s another enormous downward revision to this jobs growth when viewed in another light.
“If it seems too good to be true, that’s because it is,”
said Bloomberg chief economist Annie Wong. “The [jobs day] gain is mostly due to seasonal factors.” Indeed, the BLS uses data revisions in its January report that can spike the monthly numbers, further deflating its impact.
In short, today’s jobs bonanza does not reflect the real economy. That won’t stop President Biden from drawing on it during his State of the Union address on Tuesday to falsely claim American workers are winning under his economy.
What he’ll ignore is how the jobs report also shows workers continue to get poorer under his leadership, as real wages maintain their steady decline. Americans are reminded of their eroding living standards every time they visit the grocery store, where food prices have risen by around one-quarter over the past two years due to the president’s reckless policies.
Watch to see if Biden has the gall during SOTU to lie to the American public that “wages are rising.”
Broader economic data also contradicts Biden’s upcoming sunny SOTU remarks. Credit card debt is at a
record high, as Americans are borrowing to cover the cost of inflation. A new
report by LendingClub finds around two-thirds of Americans are living paycheck-to-paycheck. JCN’s latest SBIQ monthly
poll reveals two-thirds of small business owners worry that economic conditions will force them to close.
“I try to absorb as much [inflation] as I can before having to increase prices, but that can get to a point where it isn’t in your control anymore and you have to make decisions necessary to keep your business going and thriving despite these challenges,”
says Katie Lee, owner of Coffee Haven in eastern North Carolina.
Jeanette Georgitis, owner of Salty Sistas Restaurant and Bakery Owner nearby,
says prices have risen so high that people now prefer just to eat at home. “If we do not find a way through this soon, we will have no choice but to close.”
First Class Tattoo parlor in New York City
tells the Wall Street Journal that it is experiencing record cancelations from customers who can’t afford to pay for this discretionary purchase. “In my 15 years doing this, I’ve never seen people calling up and saying they don’t have the money to spend right now ... because their current situation is pretty bad,” says the owner.
Hair stylist Sharon Phillips
says her clients have stopped coming in for hair colorings and have pushed their cuts from once a month to every six weeks or longer. “I can honestly say, this is the first time [in more than 30 years] I have been scared about making it.”
This anecdotal evidence from real small business owners about the state of the economy is arguably more powerful than muddy BLS jobs numbers. Just don’t expect this on-the-ground reality to be reflected in Biden’s rosy SOTU rhetoric.
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