On the morning of Friday, May 7, the Bureau of Labor Statistics released its most recent jobs report.
To put it mildly, the numbers are not encouraging. In fact, when comparing the numbers that were predicted to emerge from the report to the ones that really did, this report is the largest miss — the largest failed jobs report prediction — since 1998.
Following this terrible news and how it has emerged in the wake of the Biden Administration’s utterly unprecedented deficit spending, severe inflation fears are beginning to rear their ugly head.
Let’s go through some of the report’s results.
A Terrible Jobs Report
The first and most important number in this latest report is that in the month of April, only 266,000 additional non-farm jobs were created. To put that in perspective, Dow Jones predicted that the number would be 1 million.
The unemployment rate sits at 6.1%, which amounts to 9.8 million people. The predicted number was 5.8%.
However, the true employment situation is likely even worse than that statistic suggests. The official unemployment rate published by the BLS, known as U3 unemployment, explicitly does not count people who wish to work but who have given up looking for a job because economic conditions are too unfavorable. It also does not count the number of people who are working part-time, but who would like to work full-time.
Thus, if people are deliberately refusing to look for work because they know that they can collect more money from the unprecedentedly high combination of the current state and federal unemployment benefits, these people are simply not counted in the official unemployment rate.
This gives a misleading picture of the situation and presents things as better than they really are.
Further statistics revealed that 18,000 manufacturing jobs were lost in April, that the black and the female unemployment rates are up, and that more Americans without college degrees are unemployed than were before.
One final point to make is that job reports are frequently revised in future months, though the revisions are rarely reported on. Most revisions trend downward. Therefore, the real numbers, again, are probably worse than this report suggests.
Mind you, these results are occurring even after a total of about $6.1 trillion in COVID-related spending by the government. An economy cannot function by mere infusions of cash alone.
If people are not producing and offering critical goods and services, if supply chains are not being maintained, if people find that they can make more money by not working than by working, then things will break down no matter how much money the government throws around.
Eventually, stimulus spending begins to have diminishing returns. The only result from all of this spending will be a great deal of inflation.
And this has become so obvious that even CNN is beginning to admit it, saying in a recent report that, “if you haven’t felt [inflation] yet, it’s coming.”
The government has run an unprecedented economic experiment on the country since the COVID-19 pandemic started, and the consequences of that experiment appear to be imminent.