After the blockbuster employment report that showed 517,000 new jobs created in August, the White House was out in full force building the optic that we have one of the strongest labor markets in history.
President Biden said that "the strong labor market was proof we have a strong economy."
On Monday, Treasury Secretary Janet Yellen said, "You don't have a recession when you have 500,000 jobs and the lowest unemployment rate in more than 50 years. What I see is a path in which inflation is declining significantly, and the economy is remaining strong."
Riddle me this:
How do you have a jobs report that easily increased 2-3 times the average number of jobs created when company after company is announcing layoffs? Every day, companies are announcing layoffs.
Now, why in the world would a company decide to significantly build its workforce when there is a chance of a recession and other companies announcing layoffs soon?
Why did the Department of Labor reverse last year's second quarter jobs gains from over 1,000,000 to a NEGATIVE 287,000 JOBS LOST? They did so very quietly, and unfortunately, the media did not touch the story. For a link to my webinar, send us a request at info@prudentmoney.com. I covered this story in the webinar.
Oh, and there are a few question marks about Treasury Secretary Yellen's comments. She said that inflation is "declining significantly?" I don't know about you, but I am still paying 20% plus more than I should at the grocery store, eating out, and just about everything else that requires money. Maybe she was referring to another planet.
Here is the bottom line – These are smart people, and none of this adds up. They need the optic of a strong labor market and economy for two reasons: First, don't forget we are less than two years away from the Presidential Election. Second, fighting inflation through higher interest rates is much more tolerable with a belief in a strong labor market and economy.
Like it or not, politics are politics, and we all have to live with it.
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