Friday’s employment report from the Labor Department far exceeded expectations. Mainstream analysists called the report “stellar.” Some pundits even called it the best jobs report in history.
According to the Labor Department, the US economy added 266,000 jobs in November. Economists had projected an increase of around 187,000. The unemployment figure dropped to 3.5%.
Peter Schiff talked about it in his latest podcast. He called it a “Trumped-up” jobs report.
Pundits keep saying the unemployment rate is at a 50-year low. Peter explained that this is not true. Fifty years ago, the methodology for calculating unemployment was much different than it is today.
“If we had to calculate unemployment using the same statistical measure that they were using 50 years ago, the unemployment rate would certainly be well north of 10%.”
President Trump even alluded to this on the campaign trail when he called the unemployment numbers fake and said they could even be as high as 30%.
“Now, I think he was exaggerating things as he often does, but he was right in concept that the unemployment number was a fraud; it was a hoax; it was a con. And it’s the same fraud, hoax and con now that it was when Obama was president. So, all this is fake news when they want to talk about how low the unemployment rate is.”
Peter pointed out if you look at the household survey that comes out with the employment report, it was very weak. In that survey, the US only created 83,000 new jobs and 80% of those were part-time.
“It shows you that, hey, everything is not as great as these guys are pretending.”
As far as the 266,000 jobs created according to the establishment survey, we don’t know how many are part-time, or how many went to the same person. Many people work multiple part-time jobs and each one is counted as a job in the statistics.
“Clearly, if 80% of the jobs created in the household survey are part-time, there’re a lot of people getting part-time jobs … All these numbers really can be taken with a grain of salt.”
Trump touted a strong increase in manufacturing jobs in a tweet. That number came in at 54,000. But 48,000 of those were GM employees going back to work with the end of the strike.
“These are not new jobs. These jobs already existed. It’s just that the people who had them weren’t showing up to collect a paycheck. Well, they ended the strike. So, we didn’t really create 54,000 new jobs. And in fact, the prior month manufacturing lost 43,000 jobs. So, if you net the two months together, it’s not that big a deal.”
Peter pointed out some other things that skewed the numbers. For one thing, the reporting period was five weeks, which is on the long side. Thanksgiving also fell late in the month this year. That skews it a bit through seasonal adjustments.
“So, there’s a lot of reason to believe that maybe you got 100,000 extra jobs because of where Thanksgiving was and how long the reporting period was and then you throw in these striking workers who returned to work, this is really no big deal of a jobs report. I mean, is it a terrible report? No. I mean, it wasn’t way below estimates. But it’s nothing out of the ordinary. When you back out some of these factors, this is just par for the course. This is the same type of numbers that we’ve been getting under Trump, that we’ve been getting under Obama. We’re creating a bunch of part-time jobs, service sector jobs, low-paying jobs.”
Peter said you are seeing job growth in government employment, healthcare, retail and other services – not manufacturing.
“We’re simply continuing in the dark ages we had under Barack Obama with these low-paying, part-time jobs. And we continue to lose higher-paying, productive jobs, full-time jobs.”
Meanwhile, the workforce participation rate ticked down and hourly earnings were up just 0.2.
“These are not spectacular numbers. To describe this as the greatest number of your lifetime — I mean, I can see Donald Trump saying it’s a blowout because, again, that’s what Trump does. Trump is going to hype up anything. Again, this is Trump steaks. Every time you see Donald Trump talking about how great the economy is, just imagine him selling one of his steaks. And that’s what hes’ doing. He’s selling the sizzle, not the steak. And that’s what he’s doing pretending we have a great economy.”
But the financial media is peddling the same story because they want us to believe the stock market is going up because of the great economy.
“The stock market is only going up because of the Fed. And in fact, it’s because the economy is not great that the Fed is rescuing it with rate cuts and with quantitative easing and by reassuring the market that under no circumstances will they even consider raising interest rates. That’s basically what’s driving the market higher.”
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