Why Biden’s betting unemployment will stay low for now

Today, the U.S. unemployment rate ticked down to a 50-year low of 3.5 percent as 179,000 more Americans were employed in the Bureau of Labor Statistics’ household survey. After today, there will only be three more unemployment reports before the Nov. 8 Congressional midterms: Sept. 2, Oct. 7 and Nov. 4. President Joe Biden — who said the day consecutive quarterly negative growth numbers in the Gross Domestic Product were reported by the Bureau of Economic Analysis that “that doesn’t sound like a recession to me” — is betting at least the jobs reports won’t be that bad between now and Election Day. So far, he’s not wrong.

Cartoon: Getting Hosed

Congress raises taxes to fight inflation.

Is the July unemployment report a last gasp?

The summary of the household employment data provided by the Bureau of Labor Statistics misses the point on the July unemployment report. They write, ‘the unemployment rate edged down to 3.5%, and the number of unemployed persons edged down to 5.7 million. These measures have returned to their levels in February 2020, prior to the coronavirus pandemic.’ The problem is that the civilian population is more than 2.2 million higher today than in February 2020 and the civilian workforce is 1.8 million people smaller than prior to the pandemic. Additionally, there are 576,000 fewer employed today than prior to the pandemic, meaning that the employment economy is actually nowhere near pre-pandemic levels.

End the Jan 6 Witch-hunt

The January 6th witch hunt is a political intimidation campaign by the left. The Committee has assumed absolute powers with the full backing of the Biden Justice Department with the goal of ruining Donald Trump supporters. NOW, they are targeting the wife of a Supreme Court Justice in a blatant intimidation campaign. This made for tv star chamber needs to end now.

By Robert Romano

Today, theU.S. unemployment rate ticked down to a 50-year low of 3.5percent as 179,000 more Americans were employed in the Bureau of LaborStatistics’ household survey.

After today, there will only be three more unemployment reports before the Nov. 8 Congressionalmidterms: Sept. 2, Oct. 7 and Nov. 4.

President Joe Biden — who said the day consecutive quarterly negative growth numbers in the Gross DomesticProduct were reported by the Bureau of Economic Analysis that “that doesn’t sound like a recession to me” — is betting at least the jobs reports won’t be that bad between now andElection Day. So far, he’s not wrong.

To be sure, labor markets are alreadyfeeling the effects of the ongoing supply crisis and production shortfallfollowing Covid that has contributed alongside a $6 trillion injection of dollars by the federal government andFederal Reserve to the current bout of 9.1 percent consumer inflation. In the household survey in Apriland June, both posted respective jobs losses of about 300,000 apiece, which wasslightly offset by a 300,000 gain in those reporting they were employed in May,and now the 179,000 gain in July.

So far, even as the economy has beenoverheating, labor markets are spare with still more than 10.7 million jobs openings, but that number has been droppingsomewhat precipitously the past few months, down 1.1 million from its peak inMarch.

It won’t be so bad before theelection, and afterward he’s also shrewdly betting there’s enough runwaybetween Nov. 2022 and Nov. 2024 to get the economy back off the ground beforevoter attitudes set in for the presidential cycle, which historically istougher for the opposition party to win if the incumbent party is in its firstterm. So, what’s Biden thinking?

It worked for Ronald Reagan, whosuffered some losses in the 1982 Congressional midterms amid a massiverecession that saw 10.8 percent unemployment, went on to easily win a 49-statesweep in the 1984 presidential election as the economy was already rebounding.

It’s a very rosy scenario.

The risk is Biden’s “not a recession”narrative will ultimately sound out of touch with Americans on their  most pressing issue: the health of the U.S.economy following Covid, with the global supply crisis in food, energy, paperand technology and crushing inflation. Even without joblessness, the misery index (inflation plus unemployment) is the highest since the GreatRecession.

It doesn’t help that Biden and theDemocratic-led Congress — along with left-wing corporations — are simultaneously attempting via thebudget reconciliation bill to bring about a green utopia via hundreds of billions of dollarssubsidies for wind, solar and electric vehicles, all the while levying tens ofbillions of dollars of carbon taxes on oil, coal and natural gas.

Another risk is a shallow recessionnow might also boomerang into continued high inflation, continued supply crisisproblems, labor shortages and production shortfalls, causing the economy tooverheat much more rapidly. The same thing happened in the 1970s and 1980swhich saw four successive recessions, each worse than the last, because theinflation was not controlled.

This is the second recession in justthe past three years, offering an idea of just how quickly the economy overshotfollowing the Covid spendathon and economic lockdowns after businesses reopenedsooner than thought.

The 25 million jobs that were lost inthe blink of an eye in April 2020 are nearly all recovered now, although stillnot technically greater than its Feb. 2020 pre-Covid peak of 158.8 million in BLS’ household survey, despitethe working age population of 16-to-64-year-olds increasing by almost 1.1million. In addition, 239,000 Americans who were unemployed simply left thelabor force as the not in labor force number crept up over 100 millionagain. And unemployment claims continue slowly rising from a Marchlow of 166,000 to 260,000 today.

This is what peak employment lookslike. It’s a lot like being on top of the rollercoaster. Enjoy the view, Mr.President.

Robert Romano is the Vice Presidentof Public Policy at Americans for Limited Government.

To view online: https://dailytorch.com/2022/08/why-bidens-betting-unemployment-will-stay-low-for-now/

 

Cartoon: Getting Hosed

By A.F. Branco