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Biden administration chooses data to dodge troubling economic numbers

With all the Orwellian doublespeak emanating from Washington these days, it’s important to take everything you see and hear with a grain of salt.

That goes even for talking points that are supposed to cite official data, like the Department of Labor’s latest monthly jobs report. While the Biden administration was quick to highlight some of this report, it conveniently swept its politically inconvenient data points under the rug.

In short, the labor market is not as healthy or robust as it first appears. The Labor Department’s July report showed that more than half a million jobs were added that month according to the Establishment Survey, one of two surveys that make up the full report.

Normally that would be a big number and a big sign that more Americans are working and earning a living. But, as always, the devil is in the details.

These details begin in the second survey that makes up the jobs report: the household survey, which asks individual workers, not business owners. This survey provides information such as the unemployment rate and the activity rate, the latter estimating the number of people who are working and looking for work.

Under Biden, the percentage of people participating in the workforce has remained stubbornly low and this is affecting the unemployment rate. When fewer people are working or looking for work, the same number of jobs will result in a lower unemployment rate.

This phenomenon is exactly what has been happening for months in America: people have left the labor market, artificially lowering the unemployment rate. If the Biden administration is right that the unemployment rate is near all-time lows, it’s not just because employment is rising.

In fact, the household survey also has its own measure of the total number of jobs in the country, with that figure peaking in March and trending downward ever since. It also never regained its pre-pandemic level.

Similarly, the number of people employed full-time also peaked in March and also trended downward. There are 141,000 fewer full-time jobs today than there were in March. Meanwhile, nearly 100,000 more people got second jobs in July to try to make ends meet in an environment of soaring prices due to out-of-control inflation. At the same time, nearly 300,000 freelancers have lost their jobs, likely going to work for someone else.

These are important data points because of how different surveys count the number of jobs in the country. For example, the establishment survey does not count employees of agricultural enterprises or the self-employed, but it double counts people with multiple jobs.

The result is that the establishment survey most likely grossly overestimates the number of full-time jobs that were added to the economy in July. The actual number was probably between 150,000 and 200,000.

It’s also important to note that not all full-time jobs are created equal. When Biden first took office, the average work week was 35 hours, but it has now fallen to 34.6 hours. This may not seem like a significant difference, but with over 300 million people employed, that number of lost working hours is equivalent to the loss of one and a half million jobs. Again, this serves to overestimate the number of jobs in the economy relative to the pre-pandemic norm.

Nor are today’s full-time jobs equivalent to past jobs in terms of actual pay. Under Biden, prices rose so much faster than wages that real incomes fell 5.4%. While the economy is slowly recovering jobs, those jobs just aren’t as good as the ones people lost two years ago.

Although the Biden administration may say otherwise, the current state of the labor market does not contradict the fact that the nation is in a recession.

In terms of assessing the strength of the economy, employment is a lagging indicator, meaning it tends to change after the economy as a whole has already started to change. It is therefore not surprising that other indicators like the gross domestic product turned negative before the number of jobs in the establishment survey.

But there are other warning signs that the labor market is actually signaling an economic slowdown. Unfilled jobs are falling as companies can afford to cut staff and the Conference Board’s Help-Wanted-OnLine Index is down, a sign of both job losses and of recession.

Consumers are also running out of savings and going into debt in the face of constantly rising prices. This decreases the sales of the companies which will then need fewer employees. Many companies have already started laying off or at least stopping hiring and this will continue in the coming months. But you would never know that if you only listened to Biden administration spokespeople.

This piece originally appeared in The Daily Signal

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