Latest economic report isn't all it's cracked up to be

Latest economic report isn't all it's cracked up to be

Latest economic report isn't all it's cracked up to be

The federal government may have reported a better-than-expected jobs number for July, but experts' concerns about the economy remain.

Parker, Elaine (Job Creators Network Foundation) Parker

Elaine Parker of the Job Creators Network (JCN) begins by pointing out that though the jobs have come back, "you still have high inflation, you still have contraction of GDP, you still have massive supply chain issues, you still have labor issues, [and] you still have wage inflation."

Wages, she says, are not keeping up with inflation, and gas prices are sky high, "so it's still not a pretty picture."

Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council (SBE Council), is also concerned, calling the monthly jobs report "a tale of two reports."

"We have the establishment survey that pointed to non-payroll employment increasing by 528,000, which is very good. But there's also the household survey, and that survey better captures small business and startup activity," explains Kerrigan. "That showed a more tepid employment gain of 179,000 for July, and the labor force – according to the household survey – declined by 63,000."

Economist EJ Antoni of The Heritage Foundation points out the household survey peaked back in March.

"It still hasn't returned to that level, let-alone its pre-pandemic level," says Antoni.

Just as the housing market changed overnight, Kerrigan thinks the labor market is changing rapidly.

Kerrigan, Karen (SBE Council) Kerrigan

"We are going to see signs of that in the August report," she predicts. "You have essentially existing job openings that are declining rapidly, [and] all the reports that we're getting from the small business sector is that they're laying off people, they're freezing hiring, or that they decided not to hire in the jobs that they had open."

Meanwhile, more people are coming back into the workforce, including senior Americans who are taking part-time jobs for economic reasons.

"So, there is some volatility in this July report, and we'll see what happens in September when we get the August report," Kerrigan tells AFN. "But we think the labor market is in a pretty dramatic transition as we speak."

On Friday, President Joe Biden was quick to celebrate the jobs report, saying in a statement on WhiteHouse.gov, "Today, the unemployment rate matches the lowest it's been in more than 50 years: 3.5%. More people are working than at any point in American history."

That, the president says, is "millions of families with the dignity and peace of mind that a paycheck provides," adding it is the result of his economic plan to build the economy from the bottom up and middle out.

"I ran for president to rebuild the middle class. There's more work to do, but today's jobs report shows we are making significant progress for working families."

Antoni calls the president's claims "a bunch of hogwash."

Antoni, EJ (Heritage) Antoni

"Under Trump, the average worker saw his real annual income in terms of what he could buy, in terms of real goods and services; that rose the equivalent of $4,000 per year," the economist recalls. "Since Biden took office, that has fallen the annual equivalent of $3,400. In other words, he has wiped out almost all of the gains that the average worker saw under President Trump in only 18 months."

Antoni admits that is "pretty amazing," but "not in a good way."

"This idea that the middle class is somehow thriving under this president – that is just absolutely laughable," he concludes.

The U.S. Bureau of Labor Statistics (BLS) says payroll employment rose by 528,000 in July, and as Biden pointed out, unemployment is down to 3.5%. Still, the unemployment rate for blacks is 6%. For Hispanics, it is 3.9%.