Trigger warning: if you think the economy is humming along just fine, then you should probably sit down for this one. Additional trigger warning: if you think the economic reporting from the government is unbiased, completely objective, and is never used to tell a political story, then you should probably bypass sitting and go straight to laying down on the couch.
The September jobs report got lots of headlines about the economy “roaring” and “surging” and other various ways of saying it surpassed expectations. The problem is that it’s a fat layer of lipstick on a very nasty pig.
Here are Five Fast Facts on the September jobs report:
- 📰 The Story - The official story as reported by most media outlets is that 254,000 jobs were created in September, far more than expected. As a result, unemployment fell to 4.1%. Time to break out the champagne? Well…
- 🔍 Under The Covers - For those willing to look under the covers, the cause of this unexpected job growth is very disturbing: government workers (non-seasonally adjusted) shot up by 785,000, and private sector workers actually dropped by 458,000! The problem is that government jobs don’t make products or services that benefit customers, and thus the economy. Government jobs regulate, monitor, and tax the rest of us…and we pay their salaries to do it with our tax dollars! Who wants more of that??
- 🤯 Even The Fed… - There’s a long history of fudging the unemployment numbers, and this appears to be simply a new way of doing it. But the point is that these reports have become so unreliable that even the Fed Chairman – you know, the guy in charge of setting the interest rates for everything – has questioned its credibility. That’s not a good sign!
- 🤔 Big Picture Perspective - Back in 1950, the ratio of manufacturing workers to government workers was 3-to-1. With this report, it’s flipped the other way…six-fold! Also, we need to add about 175k-200k jobs per year just to keep up with population growth. This report is showing so few private sector jobs being created that we aren’t even keeping up with that pace.
- 👀 Open Secret - One final piece of data on this report that is being ignored by the big media outlets is that the number of second (or third) jobs hit an all-time high, meaning more people than ever before need more than one job to pay the bills. That’s not exactly the sign of a healthy, robust economy, now is it?
🔥Bottom line: So what does all this mean? Well, without this huge spike in government jobs, the unemployment rate would have gone up to 4.5%, and the Sahm Rule would have been triggered, meaning we’re officially in a recession. Given that we’re one month out from a major election…well, you can connect the dots.
Do you think the economy is doing well?
Let us know by connecting with us on Facebook and Instagram! Also, remember to share this newsletter with your friends & coworkers!
Btw, If you’ve read this far and haven’t yet signed up for the weekly Paycheckology newsletter, CLICK HERE!
