Peter Schiff: Job Numbers Not as Great as the Headlines Make Them Seem
The Bureau of Labor Statistics (BLS) released the non-farm payroll report for September on Friday. Once again, the headline numbers didn’t reflect reality.
Peter Schiff talked about it in his podcast. He said all of the people like President Biden probably shouldn’t be bragging about creating jobs people wish they didn’t have to have.
Not only did the number of jobs “created” come in well above expectations, but the BLS also revised previous reports upward, something that hadn’t happened this year.
The projection was for about 160,000 new jobs. The number came in at 336,000.
But despite all of the new jobs, the unemployment rate went up from 3.7% to 3.8%.
The labor force participation rate was unchanged at 62.8%. Peter noted that it doesn’t really make sense that unemployment rose without an increase in the number of people in the labor force looking for work.
It’s always hard to understand these numbers, and I generally take them with a grain of salt because I don’t necessarily believe them.”
Peter noted that despite the fact the BLS revised the total number of jobs created in August upward, the number of private-sector jobs was revised downward. That means there was a big jump in the number of government workers.
There was also a big increase in government jobs last month based on the unadjusted numbers.
Remember, there’s a big difference between private-sector workers and government workers. Number one is the private-sector worker — their salary is paid for by the private sector. They’re covered by the profits of their employers. But government workers — their salaries have to be paid by the taxpayers.”
Many of those workers’ salaries will have to be paid for by borrowing. This is certainly the case with new federal government employees given that the Treasury is already running massive deficits.
All of that adds to the inflationary pressures in the economy because money is going to be created to pay the salaries of government workers.”
The other problem is government workers aren’t productive.
Some of them might be. But most of them are not. In fact, it’s actually the opposite. Government workers actually add to the red tape that the private sector has to deal with. So in many cases, the government workers are subtracting from the productivity that would otherwise be created by the private-sector worker.”
Private-sector workers produce things. This helps ease inflationary pressures by increasing supply. But government workers enforcing regulations make it harder to produce stuff.
And what if some of those new workers are IRS agents?
Do you think extra IRS agents harassing small business owners is good for the economy? Do you think that’s going to lead to a more productive economy? Absolutely not! To the extent that a lot of these small business owners have to waste their time dealing with an audit, that means they can’t focus on their business. If they have to divert some of their income to accountants and lawyers, then maybe they have less money to devote to more productive uses that would lead to more production of goods or a greater supply of services.”
Peter said he hadn’t dug deeply into the data but he suspected that they were similar to the job creation numbers we’ve seen for months.
My guess is it’s the same as we’ve had in the past where this is predominantly part-time, service-sector, low-paying jobs. These jobs are being created because people can’t get by on one or two jobs and they need a second or third job. Because the real cost of living is rising so much faster than their incomes. It’s rising so much faster than the official measures that they can’t get by. People can’t get by with just one job so they need multiple jobs. This is not a sign of a strong economy but of a weak economy and a weak labor market.”
Peter’s instinct was correct. A deeper dive into the numbers reveals the economy is losing full-time jobs while adding part-time jobs.
Looking at the household survey, we discover that part-time workers accounted for the entire increase in the number of jobholders, rising by 151,000 (seasonally adjusted). For yet another month, the number of full-time workers dropped by 22,000.
In fact, the number of part-time workers has increased for three straight months to 27.336 million while the number of full-time employees fell three straight months to 134.167 million, the lowest number since February.
And if we look at unadjusted numbers, it’s even worse. The number of full-time workers collapsed by 885,000. That was the biggest monthly drop since April 2020 when the government was shut down!
Meanwhile, the number of part-time workers surged by 1.127 million.
The number of multiple jobholders (based on the household survey) has also skyrocketed, increasing by 123,000 to 8.151 million (seasonally adjusted), the highest since January 2020. The unadjusted number soared by 368,000. That’s more than all the 336,000 payrolls reported by the establishment survey.
President Biden took to the podium to brag about all of the new jobs.
My dad had an expression. He said, ‘Joey, a job’s about a lot more than a paycheck. It’s about your dignity. It’s about respect. It’s about being able to look your kid in the eye and say, ‘Honey, it’s going to be OK and mean it. Well, 336,000 more Americans, if they have children, can say that to their children and mean it.”
Peter said it’s not a good idea to take credit for jobs that people wish they didn’t have.
If people are forced to take a second or third job because their main job no longer pays enough to cover the bills, you don’t want to brag about forcing people to moonlight.”
In this podcast, Peter also talks about the soaring national debt.