by Peter Schiff, Schiff Gold:
Beneath the veneer of headline job gains, the American economy teeters on the brink: native employment dwindles as part-time and immigrant jobs surge. Government hiring camouflages looming recession warnings. Inflation and political blunders worsen the crisis, fueling public outrage at the establishment’s mishandling of the economy.
The following article was originally published by the Mises Institute. The opinions expressed do not necessarily reflect those of Peter Schiff or SchiffGold.
The American economy is not all right. But to see why, you need to look beyond the dramatic numbers we keep seeing in the headlines and establishment talking points.
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Take, for instance, the latest jobs report. For the third month in a row, the American economy added significantly more jobs than most economists had been expecting—a total of 303,000 for March. On its face, that’s a good number.
But as Ryan McMaken laid out over the weekend, things don’t look as strong when you dig into the data. For instance, virtually all the jobs added are part-time jobs. Full-time jobs have actually been disappearing since December of last year. In fact, as McMaken highlighted, “The year-over-year measure of full-time jobs has fallen into recession territory.”
Also, most of these new part-time jobs are going to immigrants, many of whom are in the country illegally. There has been zero job creation for native-born Americans since mid-2018. While immigrants are not harming the economy by working, the scale of new foreign-born workers has papered over the employment struggles of the native-born population.
Further, government jobs accounted for almost a quarter of those added—way above the standard ten to twelve percent. Just like with government spending and economic growth, government hiring boosts the official jobs number while draining the actual, value-producing economy.
Some economists, like Daniel Lacalle, argue that the US economy is already experiencing a private-sector recession but that government spending and hiring are propping up the official data enough to hide it.
A recession is inevitable, thanks to the last decade of interest rate manipulation by the Federal Reserve—and especially to its dramatic actions during the pandemic. The recession-like conditions in full-time jobs is further evidence that Lacalle is right.
But jobs numbers are only part of the story. The stock market has been fluctuating a lot recently, not because of changing consumer needs or the adoption of some new technology, but based on what Federal Reserve officials are saying about what the central bank will do this year.
At the same time, prices are still high. And they continue to rise at a rate that frustrates even some of President Joe Biden’s biggest economic cheerleaders. Our dollars are worth about 20 percent less than they were four years ago, with no prospect of that trend reversing. That hurts.
But instead of addressing this economic pain, much less their role in creating it, members of the political class are still pretending everything is great. They’re even gearing up to make things worse by, for example, sending even more of our money to the Ukrainian government. All to prolong a war it’s losing, not because of a lack of money, but because of a lack of soldiers.
And at home, President Biden is scrambling to put the brakes on energy production and to transfer money from the working class to his base of college graduates, all before he’s up for reelection in November.
