December jobs report indicates 216k jobs added to economy
Fox News contributor Larry Kudlow joined 'America's Newsroom' to discuss the December jobs report and his take on other various economic metrics.
The White House wasted no time in taking a victory lap after the Bureau of Labor Statistics (BLS) released their monthly jobs report for December. Yet, as is often the case nowadays, the devil is in the details with these data releases, and the Biden administration isn’t going to tell you about them.
Even a cursory look under the hood of this latest jobs report reveals an economy in trouble. Here are the five biggest red flags that you won’t hear from the White House press secretary but that everyone nonetheless should know.
First, the BLS reported an increase in nonfarm payrolls of 216,000 in December, which beat Wall Street’s expectations. But that increase comes on the heels of November and October being revised down by 71,000 payrolls. One-third of the jobs allegedly added in December were ones we thought we already had.
The disconnect between jobs report headlines and the reality explains a similar disconnect between White House talking points on the economy and the American people’s widespread disapproval of it. (Oliver Contreras/Sipa/Bloomberg via Getty Images)
That also means December’s report didn’t beat expectations but missed them. And those downward revisions to nonfarm payrolls happened for every other month in 2023 except for July. Those changes, combined with a sizeable drop from the annual benchmark revision, effectively revised away about a quarter of all the jobs initially believed to have been added last year.
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The second red flag is the unemployment rate. At first glance, a steady rate of 3.7% sounds great, but it wasn’t in December. The rate stayed low because about 680,000 people left the workforce and were no longer counted as unemployed. The labor force participation rate fell all the way back to where it was in February.
In fact, labor participation has never recovered to its pre-pandemic trend following the government-imposed shutdowns. Depending on which methodology one prefers, the economy is missing between 4.8 million and 6.8 million workers. Accounting for their absence yields a true unemployment rate between 6.4% and 7.5%.
Third on the list is the kinds of jobs being created: they’re all part-time. Last month, the economy shed a whopping 1.5 million full-time jobs, the biggest monthly plunge since 2020 when the government made it illegal for people to go to work. That wiped out essentially all the full-time jobs that had been gained in 2023.
December continued the trend of people with full-time jobs having to add a part-time job to their work schedule, as they tried to make ends meet. That rocketed the number of multiple-job holders to a new record high of 8.6 million. This is important to know because every time someone gets an additional job on top of their first job, it’s counted as an additional payroll.
That’s how the number of "jobs" can rise without increasing the number of people employed. The BLS survey of households confirms this, showing roughly no additional people were employed in December versus half a year earlier in July.
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Fourth, the supposed job growth last month was disproportionately government jobs, accounting for about one-quarter of the total. That’s troubling because you need many private-sector jobs to support a single government one through tax revenue, and a three-to-one ratio is insufficient. This is simply untenable.
In 2023, government had the second-fastest job growth of any sector behind only health care, an industry heavily dependent on government spending. It’s no exaggeration to say most of the job growth last year stems from unsustainable, and inflationary, federal deficit spending.
A fifth concern from the BLS data is that native-born workers have been left behind for the last three years. The employment level of these Americans is millions below its pre-pandemic trend, while foreign-born workers returned to their pre-pandemic trend over a year ago.
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In fact, the 130 million native-born workers employed in December was about the same as it was in July 2018. That means no ground gained in over five years. In 2023, employment among foreign-born workers increased 1.3 million while employment among native-born workers rose by less than half that: just 625,000.
The December jobs report was a classic example of misleadingly positive headlines from the Biden administration. Understanding the disconnect between those headlines and the reality underneath helps explain a similar disconnect between the White House’s talking points and the American people’s widespread disapproval of the state of the economy.