The Unemployment Numbers -- Another Viewpoint -- August 6, 2021

From Breitbart:

It is summertime, but the living ain't easy. The Labor Department said Friday that around 943,000 people were added on to payrolls in the month of June, around 100,000 more than forecast and near the top of the range of estimates by reputable economists. While we do not yet have the data broken down by state, it is likely that one of the reasons for the surprising strength of the employment report was the early end of enhanced unemployment benefits in 26 states. For many reasons—largely political—many economists have resisted the idea that ending the benefits early would boost employment, which would explain why they underestimated the July figure.

The headline number gave the Biden administration something to brag about, but you do not have to look very long into the numbers to see the cracks in the foundation. 

The number of black Americans employed actually fell in July, and the black workforce participation rate declined. This is something of a calamity for both the Federal Reserve and the White House, both of which have defined economic success in terms of achieving racial "equity." 

Workforce participation also fell for Hispanic women, the demographic group that was arguably the hardest hit by the pandemic's economic impact. This decline was especially notable because of the strength in the hospitality and leisure sector, a major employer of Hispanic women.

A strong labor market is supposed to grow workforce participation. So what gives? Well, inflation for one. The average hourly wage rose 0.4 percent in July and was up four percent compared with a year ago. Those would be grand figures in most times. But consumer prices rose 0.9 percent in June and were up 5.4 percent compared with a year ago. We will not get the July price data, but even mild inflation figures—and all indications are that July saw much more than mild inflation—would mean that wages are falling in inflation-adjusted terms. No wonder why increasing numbers of workers are deciding that it just isn't worth holding a job right now.

Meanwhile, the Biden administration and its allies in the Republican Senate continue to threaten to pass the infrastructure hoax although they can no longer claim with a straight face that the thing is "fully paid for," as they did when the bipartisan deal was first announced. 

The Congressional Budget Office has found that the bill will add $256 billion to the deficit. 

That kind of deficit spending might have made sense in the doldrums of last summer, when the economy was staggering from the pandemic. But with inflation already swallowing wage gains whole and likely convincing Americans on the economic margins to drop out of the workforce, passing this bill would be an act of extreme recklessness and, for Republican lawmakers, a betrayal of their mission to rein in the worst of the Biden administration's overreach. It will make the inflation disaster a bipartisan product rather than Bidenflaton.

Recklessness. Betrayal. Republicans self-inflicting political wounds. Sounds familiar. We expect it will pass forthright.

– Alex Marlow & John Carney
Breitbart News Network