Look Under the Hood: Despite Robust Job Report, Biden’s Economy Is a Lemon

Always look under the hood. If you’re going to buy a pre-owned used car, like so many people have to do nowadays, you can’t just be impressed by a shiny new paint job — instead you’ve got to look under the hood.You’ve got to check out the engine, the oil, battery, brake fluid, and spark plugs. Friday’s release of the May jobs report is much the same idea.The shiny new paint job was a significant 272,000 increase, although nearly half of that was government and government-related jobs.However, when you lift up the hood, what you see is an incredible 408,000 job loss from the household survey.What’s the difference between the two?Well, the payroll establishment survey is mostly larger companies, where the Bureau of Labor Statistics dials up the human resources department to get a job headcount.For the household survey, on the other hand, the BLS mainly calls families and individuals to ask if they are employed or not.Traditionally, the household survey is more heavily weighted toward small businesses — and, actually, over the past year, has produced only a tiny 31,000 increase in jobs.Additionally, under the hood, the civilian labor force shrunk by 250,000.And, as a result, the unemployment rate notched up to 4 percent.And another key indicator of the labor force is the employment-to-population ratio, which fell slightly in May to 60.1 percent.The late great labor economist Ed Lazear, a former Council of Economic Advisers chair and longtime professor at Stanford University, always pointed to the employment-to-population ratio as the single best indicator of labor market strength or weakness. He was a dear friend and mentor of mine.During the Trump years, the employment-to-population ratio reached 61.1 percent. One percent higher than today’s number.However, going further back, the peak in that ratio was 64.6 percent in May 2000.So, the point is, more people ought to be working. And my guess is that, among the many complexities of the job story, one of them is that both federal and state governments, more and more, are offering overly generous benefits not to work.There’s more concern with these job numbers.Once again, full-time jobs fell 605,000 in May.But this is not a monthly problem, this is a long-playing record and the mirror image, part-time jobs, gained 286,000.If full-timers are plunging and part-timers are surging, that is not a healthy economic sign.In addition, in just May alone, 414,000 immigrants — both legal and illegal — gained jobs, while 663,000 native-born Americans lost jobs.This discouraging pattern has been going on for quite some time, but the trend line has accelerated significantly during the Biden years.And in terms of the ongoing Biden affordability crisis, if you cull through the numbers over the past 12 months, the combination of average hourly earnings for production people, times the hours worked, you get a proxy for their income. That number comes to only a 3.4 percent gain — which happens to be the same as the consumer price index — which means they’re not getting ahead of the ongoing inflation.Indeed, over Biden’s entire term, real wages have fallen while prices have exploded.So, when you look at all these car parts under the hood, frankly, I think folks are going to be left wanting more.We have to find a spiffy, new-model car.One that, when you look under the hood, you’d find tax cuts, deregulation, and ‘drill, baby, drill.’And that’s a car Americans would actually want to buy.From Mr. Kudlow’s broadcast on Fox Business Network.

Look Under the Hood: Despite Robust Job Report, Biden’s Economy Is a Lemon

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