Bidenomics Is Pouring Cold Water on the Labor Market
Friday’s jobs numbers show the labor market is softening due to Bidenomics and Bidenflation. Only 187,000 jobs were created last month. That’s below expectations, 40% less than the 12-month average, and the lowest level since the pandemic. Previous months’ employment growth was also revised down significantly, taking the sheen off recent jobs reports.
Average wages grew slower than core inflation, meaning Americans’ real wages and living standards remain stagnant. Friday’s numbers come on the heels of this week’s JOLTS report showing the fewest number of job openings and the fewest number of Americans quitting their jobs since the pandemic.
The job market over the last several months has not been nearly as strong as topline numbers suggest. The fact employee wages can’t keep up with inflation is Exhibit A. But also, a bonanza of unproductive government jobs has masked otherwise tepid job creation. According to USA Today, government jobs increased by 379,000 in the first half of 2023, making up nearly one-quarter of the nation’s total job gains.
Private businesses are facing enormous pressure in Biden’s economy. Job Creators Network Foundation’s latest SBIQ poll of national small business owners shows respondents continue to struggle with prolonged high inflation and a credit crunch caused by rising interest rates. The share who say they plan to hire over the next three months fell to its lowest level of the year.
This week, Yellow Corporation, one of the nation’s largest trucking companies, went out of business, laying off 30,000 employees. Expect more businesses that can’t access credit or keep up with rising raw material prices to follow suit. TechCrunch estimates there have been about a quarter million layoffs in the tech sector so far this year.
Another headwind: Gas prices are rapidly rising again in time for summer road trips. Average national gas prices are back to nearly $4 a gallon, up about 30 cents from a month ago. High gas prices are tough on small businesses because they corrode their already razor-thin profit margins. Families and small businesses should know who to blame. Since day one of his administration, when he canceled the Keystone XL pipeline, Biden has waged war on domestic energy production needed to reduce energy prices.
It’s no surprise that Fitch downgraded the nation’s credit rating this week in response to these Bidenomics. The rating agency said the downgrade “reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance…” The move is a wake-up call to Democrats and President Biden to stop their reckless spending and join with Republicans to get the nation’s fiscal house in order — before it’s too late.
Due to Democrats’ blowout spending under President Biden, public debt as a share of GDP is now 100%. The CBO expects it to rise to 115% over the next decade. That’s up from 80% before the pandemic. Interest on the debt is approaching $1 trillion per year and now exceeds all corporate tax revenue. Fitch reveals U.S. debt is more than two-and-a-half times higher than the median AAA rating.
In response to the downgrade, Democratic Sen. Joe Manchin warned, “America’s superpower status is in jeopardy.” Debt has defeated many of the great superpowers in world history, and it threatens to do the same to the U.S.
America’s fiscal situation, like many of its problems, can be temporarily masked by low unemployment. As long as everyone is getting their biweekly paychecks to make their minimum credit card payments, put $20 of gas in their tanks, and pay their taxes, the economy can remain propped up.
But a labor market pullback, which has perhaps already started, threatens to pop this bubble. High and rising interest rates may act as the pin.
Alfredo Ortiz is president and CEO of Job Creators Network, author of The Real Race Revolutionaries, and co-host of the Main Street Matters podcast.