According to the Bureau of Labor Statistics, the U.S. economy created only 49,000 net jobs in January following a decline of 227,000 in December. While the unemployment rate tumbled from 6.7 percent to 6.3 percent, about half of the decline was due to workers dropping out of the job market, too discouraged to look for work.
The BLS does not have a category for “lost jobs due to government stupidity.” If it did, that would be one of the leading causes of unemployment.
In truth, the U.S. economy is in a hole and it’s getting deeper. The numbers should give political impetus to Joe Biden’s $1.9 trillion pandemic relief bill but Congress is too busy at the moment impeaching someone who isn’t even in office anymore and the Democrats won’t be deflected from taking their pound of flesh. The American people and the economy are going to have to wait for the revenge of the Left before relief can be discussed.
Some states and localities re-imposed restrictions on businesses in December as cases spiked. Some of those restrictions were loosened in January, though perhaps not in time to affect the jobs report, which measures employment in the middle of each month.
As hiring has slowed, many employers have continued to lay off workers. The number of applications for unemployment benefits, though declining for the past few weeks, remained at an elevated 779,000 last week.
Cases are still spiking despite the lockdowns and no one has yet to answer the question of when does this cycle end. At what point does the damage to the economy exceed any conceivable gain in battling the pandemic?
And what about extended unemployment benefits? There’s another extension on the way in the Biden relief bill and no one — at least not anyone in the administration — is asking whether those extensions are preventing people from going back to work. If you can make more money sitting at home than you could at the office or the plant, why bother to work?
And what of the effects of long-term unemployment?
Two in five jobless Americans — or more than 4 million people — are now classified as long-term unemployed, which the Labor Department defines as being out of work for six months or more. And that total, which rose again in January, is likely an undercount: Combined with another 4 million who have stopped searching for work entirely, roughly one in 20 people who were working a year ago have now been shut out of the labor market for more than six months or dropped out altogether.
That number has continued to rise each month even as the overall unemployment rate has dropped.
Experience tells us that the more time a worker spends out of a job, the longer it takes for him or her to return to employment. In many cases, the company that employed the worker has gone out of business and the worker will either have to find another job in the same industry, or retrain for another. That takes time, which will slow any economic recovery.
Add all the roadblocks that Biden is putting in place that will impact job and business creation, and the likelihood that we’ll still be in a slow-growth, no-growth economy is very good.
I know Biden wanted a 3rd term for Barack Obama but did he have to duplicate his economy?