Why such a bad jobs report, again?
With massive monetary and fiscal support and a government deficit of $2.77 trillion job creation falls significantly short of previous recoveries and the employment situation is significantly worse than it was in 2019.
It gets worse. Real wages are in the basement. Average hourly earnings have risen 4.7 percent in 2021, but inflation is 6.8 percent, sending real wages to negative territory and the worst reading since 2011.
According to the Bureau of Labor Statistics, people not in the labor force who currently want a job did not change in December, at 5.7 million-717,000 higher than in February 2020.
The number of long-term unemployed (those jobless for twenty-seven weeks or more) remains at 2 million in December, or 887,000 higher than in February 2020. Long-term unemployed accounted for 31.7 percent of unemployed.
Stagnant labor participation in the middle of a strong recovery and the second-largest deficit on record. Wut?
A large number of resignations is not positive but is more evidence of a stricken labor market where hundreds of thousands of Americans cannot afford to go to work because the costs outweigh their salary. This is the full side effect of inflation.
This does not bold well for American workers. High inflation and higher taxes will limit future job opportunities, especially among small and medium enterprises — small businesses will continue to suffer rising input prices and weaker margins.