Editor’s Note: This is an abridged version of an interview that appeared in this week’s Liberty Nation Radio Show.
Fresh off touting Bidenomics and the recent employment growth, President Joe Biden found some unexpected figures in the latest jobs report. To explain all the details and figure out why this isn’t necessarily looking good for America, we spoke with Liberty Nation’s Economics Editor Andrew Moran.
Mark Angelides: First off, give us a rundown of what the latest jobs report said, in fact, even better, tell us what it was expected to say and then what it said.
Andrew Moran: Well, it was expected to be just another sign that the US jobs market is slowing down. And the report did show that the headline figure was 187,000 new jobs in August; the original estimate was about 170,000. So that came in slightly better.
But overall, when you dive deeper into the numbers, it was not a healthy jobs report at all. I mean, the unemployment rate ticked up to 3.8%, but there’s a lot more under the hood that should be a cause for concern. One of the most notable components of that non-farm payroll report was the revisions. It was a revision to a revision to a revision report, because this represented the eighth consecutive revision — every month so far this year, the jobs report has been revised.
MA: Why do they keep getting it wrong? Is it the eternal sunshine of the spotless mind? Is it desperate optimism?
AM: The official word from the Bureau of Labor Statistics (BLS) is that all the jobs reports are based on a couple of surveys. So as time goes by, they get more data coming from these establishment household surveys, and that’s how they come to the revisions.
The problem with these revisions is that they have been extended for too long. So outside of recessions, there haven’t been six consecutive months of revisions since 2007 when the housing market collapsed. Part of it is how the government extracts the data, how it compiles it, and how it puts it together — because it’s not only the jobs report being revised: The latest GDP figure also was revised downward. So, is it cautious optimism? Is it overestimating? I can’t say exactly. There’s no official word from the BLS, but it raises some eyebrows over how you constantly have the size and frequency of the revisions.
Jobs Report Signals Economic Pain Around the Corner
MA: You mentioned that the unemployment rate reached 3.8%. Now what does that mean? Because there’s also the non-employment rate. I’m not sure what that figure is, but that represents people who are looking for work but have decided this isn’t working out. Are they included in that?
AM: I think you’re referring to the U-6 unemployment rate. It actually went up to 7.1%. That’s the people who are working part-time but wish to work full-time or people who are long-term unemployed. That number actually jumped. Now the 3.8% number, the reason it went up and at the same time there was still an increase in jobs was because more people returned to the workforce or are just starting to enter the workforce. And why is that happening? Well, the San Francisco Fed reports say that pandemic-era savings are going to be exhausted by the end of the year at the latest, and then people run out of money. They have to get jobs. Credit card debt reached a trillion dollars in the second quarter, and, of course, inflation is still elevated. The cost of living is sky-high, and a lot of people are being forced to go back to work. But if you look deeper into the figures, you see the number of people working two or more jobs has remained above 8 million.
Before Biden, this was around 4 million, so it doubled under his watch.
MA: What other numbers are the administration not keen to have as headline news?
AM: If you look over the last two months, there’s been a decline of 600,000 full-time jobs, and at the same time, there have been a little more than 1 million new part-time jobs in that same span. So is the United States turning into a part-time jobs nation, as it was during the Obama years? That remains to be seen. Those are some important numbers to monitor over the next few jobs reports – especially as they continue to revise the figures.
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