by Sundance at The Conservative Treehouse
The Bureau of Labor Statistics has released the August jobs report [Data Link Here] showing only 235,000 jobs created in August. Economists and financial analysts were predicting 750,000+.
While the financial punditry are jaw-agape with disappointment, these results are in line with the background data and should not have been a surprise. Within the BLS data you will note the retail sector lost 29,000 jobs and the leisure and hospitality sector remained unchanged.
Massive inflation and price increases in fuel, gasoline, energy costs and food pricing is slowing down retail purchasing of non-essential goods. The working class are cutting back non-essential purchases and focusing on how to pay for groceries, electricity and gasoline. Connected to this checkbook issue, the working class are not spending on leisure and hospitality. Everyone is focused on making ends meet. Spending decisions are prioritized.
The government COVID subsidies have also created a false bottom. Service sector workers could make more money from COVID bailouts than they could by returning to work. Some families made the decision to stay home, drop the daycare cost for their kids, and actually net a higher overall income position from government relief funds. This dynamic is mostly noted in the lower tier of the income and wage earning employment category.
Government run education, local and state, also saw a drop in jobs of -26,000 simultaneous to kid s returning to school. Why did this happen? Well, private sector education gained +40,000 jobs. This is in line with the cultural shift. There is so much COVID propaganda, and manipulation of teaching outcomes as a result of unionized education dictates around COVID, many parents have had enough with the nonsense, mask mandates and indoctrination and are taking their kids out of public schools.
We have yet to see the issues of low wage growth and higher costs-of-living hit the housing sector, but it will come. On a macro level mid-range home values peaked, then plateaued in late May and early June. New home construction has slowed significantly. These issues are all connected to a very serious drop in real wages. The current paychecks of the middle-class cannot keep pace with inflation, the result is less net income…. which means less spending…. with means less jobs in sectors that benefit from consumer spending.
Yes, there are regional housing markets with home/property values increasing. Not coincidentally those markets are in the regions where COVID freedom is highest and government restrictions on the economy are lowest. However, on the overall macro level the housing/property values are flat now. People are hunkering down, making ends meet and having kitchen table conversations about spending priorities.
Remember, two-thirds of the U.S. economy is dependent on consumer spending. When consumer spending contracts, because worker wages are eaten up by price increases on unavoidable essential goods, the economy overall begins to stall out. This outcome of “stagflation” is the primary reason why so few jobs were created in August.
COVID will be blamed, but the root issue is massive inflation combined with government spending… which creates lower dollar values….. which creates even more inflation.
During our previous discussion on historic, predictable and purposeful food inflation…
Continue Reading