New Jobs Report: Full-Time Jobs Disappear as Fewer Americans Find Work | Mises Wire

According to a new report from the federal government’s Bureau of Labor Statistics last Friday, the US economy added 353,000 jobs for the month of January while the unemployment rate held at 3.7%. CNN news was sure to tell us that this was a “shockingly good jobs report” and it “shows America’s economy is booming.” 

At this point, many of us who follow these numbers have become accustomed to the routine: the BLS reports “blowout” jobs numbers each month, and the legacy media dutifully reports that the jobs growth is astoundingly good, proving all is well in the economy. 

The media rarely reports on any other economic indicators with nearly as much enthusiasm. The monthly jobs report well, one specific statistic within it has become something of a proxy for the state of the economy overall. 

There are a couple of problems with this approach, of course. The first is that the jobs numbers a trailing indicator of economic growth (or decline) are repeatedly contradicted by at least half a dozen other economic indicators. Many of these other indicators are, unlike jobs numbers, leading indicators, and are more useful if we’re actually looking for some hints at what is in store.

If we take a larger look around, we find this: The Philadelphia Fed’s manufacturing index is in recession territory. The same is true of the Richmond Fed’s manufacturing survey. The Leading Indicators index keeps looking worse. The yield curve points to recession. Business bankruptcies surged 58 percent in 2023. Net savings turned negative for only the second time in decades. The economic growth we see is being fueled by the biggest deficits since covid. 

But, there’s also the problem that the jobs report itself isn’t so impressive once we look beyond the headline establishment survey jobs data. 

The first fly in the ointment of this “shockingly good jobs report” is the results we see from the household survey. The household survey is a survey of actual people who are asked if they are employed. The establishment survey, on the other hand, is a survey only of large employers and the total number of jobs i.e., not job holders. 

via mises.org

You can feel the level of economic activity is not “booming,” whatever CNN or CNBC are saying. Or Professor Krugman. It did not use to be so difficult to just look at the financial page and figure out what was going on. There used to be a bit of massaging the numbers back in the Reagan administration, but what goes on today is, well, dishonest!