After months and months of bad news and metastasizing crises, who can blame President Joe Biden for seizing one glimmer of good economic news? Too bad the good news isn’t really that good at all.
On the surface, the economic news from Friday looked celebratory. The Labor Department reported that the economy had created 372,000 mobs in June, beating the consensus forecast (a rare thing under Biden). The unemployment rate held at 3.6%. And, to top it off, jobs in the private sector regained all the losses from the COVID lockdowns.
In response, Biden rushed out a statement bragging about how “this has been the fastest and strongest jobs recovery in American history,” and that it “would not have been possible without the decisive action my administration took last year to fix a broken COVID response, and pass the American Rescue Plan to get our economy back on track.”
He went on: “We have more Americans working in the private sector today than any day during Donald Trump’s Presidency – more people than any time in our history.”
Only the last claim has any truth to it.
The idea that Biden presided over the fastest job growth in history is meaningless since he took office after the biggest decline in jobs in history. From February 2020 to April 2020, the economy shed a stunning 22 million jobs – thanks to COVID lockdowns we now know were completely pointless.
In the nine months following that trough, the economy added back 12.5 million of those jobs. Then Biden took office. And in the 18 months since he’s been calling the shots, the economy recovered only 9 million more jobs, and even now hasn’t surpassed the previous peak in employment.
So how, exactly, does Biden come to the conclusion that his $2 trillion “rescue” plan should get credit? If anything, it slowed down what had been a mad rush of people returning to work.
It is true that private-sector employment hit a new peak in June, surpassing the previous peak set in February 2020. But just barely – by all of 140,000. Total employment, however, is still 524,000 below its Trump peak.
Worse, even that meager private sector gain hasn’t been nearly enough to keep pace with population growth over the past two-plus years.
Labor Department data show that the working-age population in America shot up by 4.2 million from February 2020 to June 2022.
But what about that low unemployment number? That’s certainly something to cheer about, isn’t it? For Biden and his media lapdogs, maybe.
In fact, the unemployment rate tracks only those who are looking for work or who have a job. Anyone who has dropped out of the labor force entirely – because they’ve retired or just gave up looking for work – doesn’t get counted as unemployed.
Well, guess what? The number of people who aren’t in the labor force has climbed by 4.8 million since February 2020. As a result, only 62.2% of working-age adults (those over 16) are in the labor force. That’s down from 63.4% at the pre-COVID peak.
In other words, the bulk of the decline in unemployment isn’t because people are finding work. It’s because people are giving up finding a job altogether.
If those 4.8 million were still in the labor market, today’s unemployment rate would be 5.5%. That’s not horrible, but it is far from something to brag about. Especially when you consider that those with jobs have seen their real wages decline thanks to Biden’s inflationary spending policies.
So, what is left for Biden to brag about? What else can he say that his “rescue plan” achieved?
At least, nothing good.
— Written by the I&I Editorial Board