More Lies About Jobs Data

Today - March 4, 2022 - we got what looked like a very strong jobs report. Nonfarm payroll growth of 678,000 in February, with January's gain revised up to 481,000, December's at 588,000, and November's at 647,000. The unemployment rate at 3.8%. Average hourly earnings up 5.3%. That all sounds pretty darn good, right? No wonder the Biden Administration is crowing about their economic track record, how they've added 7.7 million jobs since they took office.

Not so fast.

As The Curmudgeon has noted before, politicians do precious little to "add" jobs, unless they hire interns and aides. (Bill Clinton was particularly good at that.) The private sector adds the jobs. The best politicians can do is to get the hell out of the way, cut regulations and not add new ones, and let businesses do their thing. And that's not the Biden Administration's style. They like to regulate.

Now - and this is a digression, so stay with me - the ultimate government interference in a business' operation would be to shut it down. Of course, legally, the government can't do that, unless the business is itself violating a law or regulation. The government has no Constitutional authority to shut down businesses.

Yet, in March 2020, that's exactly what the U.S. government did, en masse. It shut down a lot of businesses, and those businesses just stood by and let it happen. Here's where the digression ends.

How did that affect jobs? Well, in March 2020, nonfarm payrolls fell by nearly 1.7 million, the biggest drop on record, more than double the worst month of the Great Recession in 2008-09. And that was just a partial month's result; the government shutdown didn't hit until well into the month.

Then April came along, and said, "Hold my beer."

The April nonfarm payroll loss was a staggering, dumbfounding, jaw-dropping 20.7 million jobs. More than in all of the Great Recession.

(For reference, the economy had been humming along very nicely before that. Unemployment was at record lows, and payroll gains were averaging about 236k/mo. in the six months before the shutdown. And let's state right now, for the record, that not only was the shutdown wrong, and illegal, and unconstitutional, it was unnecessary, and did nothing to change the trajectory of the pandemic, or to save lives. That's been proven. If you believe otherwise, you need bandages on your knuckles.)

Now, two of the biggest states in terms of employment, New York and California, shut down again in December 2020 (what's the definition of insanity, again?), and as a result, nonfarm payrolls for the nation as a whole shed 306,000 jobs, because those states' job losses dwarfed all other states' combined job gains.

So, taking those three months of shutdowns together, the U.S. economy lost 22,668,000 jobs. Due to stupid, unnecessary, illegal, government-mandated business closures in response to a pandemic. Let that sink in.

Now, in all the months since April 2020, excluding December 2020, when California and New York decided to repeat the failed shutdown experiment, nonfarm payrolls have gained, in the aggregate -

20,544,000 jobs.

In other words, we haven't added one. damn. job. We're still more than two million jobs behind.

No wonder there are still help wanted signs everywhere. We've nowhere near caught up to where we were two years ago, much less accounted for the normal growth that should have occurred since then, plus inflationary growth spurred by excessive government spending over those two years. That should add up to at least the current 11 million job openings.

Moreover, since Joe likes to tout his big numbers (which are nothing more than replacements of jobs lost during the shutdown), let's look at some of the numbers replaced under Trump:

May 2020: 2.8 million jobs, June: 4.8 million, July: 1.7 million, August: 1.6 million, September: 716k, October: 680k.

As MC Hammer sang, "You Can't Touch This."

As for that 3.8% unemployment rate - it was 3.5% in February 2020, before the shutdown, under Trump. So we're still not fully recovered there yet, either.

Finally, that 5.3% payroll growth rate is great - except that the inflation rate is 7.5%. So real wage growth - adjusted for inflation - is negative, by more than two percentage points. That's why we're all feeling squeezed.

A final note. I was listening to a business news anchor interviewing one of President Biden's economic advisors, and the advisor kept touting all that the administration is doing to bolster up the supply side. Wait a minute - supply side economics? That's "trickle-down" economics, right? Didn't Joe just tell us in the SOTU the other night that trickle-down economics doesn't work? And yet his advisors are pushing it?

Glad to see the liberals abandoning the dark side, and coming to the light. Of course, they're not actually embracing supply-side economics, or we'd be drilling oil like mad. But it's nice to hear a liberal economist acknowledging that it's the right approach.