Reports of our job growth greatly exaggerated

Last week, the Department of Labor revised its previous reports about job growth in the United States by a whopping 818,000 jobs. Of course, it’s natural to treat the overcounting of that many jobs as an intentional deception to help reelect the incumbent party. But not so fast. If that were the case, would not the puppet masters in the deep state have been smart enough to wait to reveal this information until sometime after the election? It is not helpful to the Biden-Harris administration to drop a gigantic jobs write-down number on the electorate just a little more than two months before the election. Plus, the political futures market interpreted the data that way, decreasing the probability of a Harris victory immediately after the news was reported.

In addition, the monthly employment reports are heavily dependent on estimation, whereas the final numbers are based more on actual job counts from payroll-related data. Also, recent surges in illegal immigration wreak havoc not just on the rule of law, but also on beleaguered statisticians working for the Labor Department who have to count job growth for everyone, including people who don’t want to be counted.

So, following the medieval theologian William of Occam and his famous razor, the simplest explanation is most likely the true one. The jobs write-down is most likely a by-product of incompetence, not a conspiracy to delude the public. Conspiracy theories, while occasionally true, often block deeper thinking about the subject at hand.

What, then, are the deeper truths worth uncovering about the jobs market?

For those who questioned the narrative of a hot jobs market, the write-down comes as a vindication. During the period in which we allegedly created 3 million jobs, the unemployment rate was rising and the Pollyannaish pundits produced a steady stream of commentary claiming that the actual economy was so much better than people thought. It looks like the people were right and the pundits were wrong. After all, the people who actually shop at grocery stores saw inflationary pressures while the Federal Reserve was still in denial. Perhaps it should be a job requirement that the Fed chair do his or her own shopping.

The media party line about a hot economy also looks bad because the last time the Labor Department suggested this large of a correction in job growth data was in 2009. Back then, statisticians were wrong because they filled out their monthly jobs estimates using models based on normal economic conditions, not recessionary ones. Miscounting jobs at that scale suggests weakness in the economy and a lack of awareness of that weakness by the scorekeepers in Washington.

The technical definition of a recession is half a year of shrinking gross domestic product. But GDP as a measurement of the economy is deeply flawed. It is based largely on spending, not production. It generally ignores all the steps in production before purchases. Gross output was created to measure the entire economy, from mining the metal to refining it, bending it into a chassis, building a car inside of it, and shipping it off to the showroom. GDP only counts that last step. Gross output indicates that business has slipped into contraction several times in the past couple of years. The period pertinent to the 818,000-job write-down showed less than 1 percent real growth in gross output. The only thing that kept us out of a technical recession was that government policy stuffed consumers’ wallets with enough money to keep on spending, an unsustainable and inflationary strategy.

But the fog of distortion around labor markets is not just a matter of a bad patch in the economy. Our problems are cultural and of a far worse consequence and longer duration. In a very real sense, two of the big stories of last week—a Democratic National Convention with an abortionmobile parked outside and promises of lavish social spending inside and the inability of the U.S. economy to produce an adequate number of jobs—are entangled with one another. We’re used to thinking of jobs as things we need to get businesses to offer and then people automatically take them. Those days are over. We don’t have a shortage of job offers so much as we have a shortage of job acceptances. A job is only created when there is an employer and an employee. America has tens of millions of people who will not accept a job and 70 million people who cannot accept a job because they were never permitted to be born.