More Fake Happy News About Jobs
Paul Craig Roberts
The Bureau of Labor Statistics reports that the US economy created 148,000 new private sector jobs during July. The jobs number does not translate into employed people as increasingly Americans hold two or more jobs. For example, the BLS reports that from June to July the number of multiple job holders rose by 233,000 which is 85,000 more than the 148,000 new private sector jobs. What we are seeing is not more people employed, but more multiple job holders. Since May the number of multiple job holders has increased by 534,000. https://www.bls.gov/news.release/empsit.t09.htm
The claim of a falling rate of unemployment over the past decade is inconsistent with the rising labor force participation rate. Normally, when employment prospects are good the labor force participation rate increases. To explain away the inconsistency, economists claim that the decline in the labor force participation rate reflects the increased retirements of the baby boomer generation. However, the BLS reported that the labor force participation rate for older workers of retirement age surged to the highest level in 7 years.
So, what is really going on? The answer is that retired people, thanks to the Federal Reserve’s low to zero interest rate over the last decade, cannot live on their pensions and their savings. They have to take part-time jobs to make ends meet. Younger people, however, cannot form independent households on the basis of part-time jobs, and as they have no pension income to supplement the meager pay of a part-time job, have dropped out of the work force.
The reason the reported unemployment rate is low is that the millions who have dropped out of the labor force because they cannot find life-sustainable employment are not counted as unemployed. What do these people do? They live with parents or grandparents and they work cash jobs house sitting, walking dogs, cutting grass, and various handiman jobs.
There are many problems with the payroll jobs report, and always are. For example, the July report finds 16,000 new manufacturing jobs, but the manufacturing index weakened for the fourth consecutive month. How do manufacturing jobs rise when manufacturing activity declines?
Another anomality is the collapse of seven trucking companies this year.