The recent announcements from the U.S. Bureau of Labor Statistics have ignited discussions about the real state of the economy. While claims of job creation are made, it’s essential to examine the underlying truths and the narratives being presented.
Recently, the government touted the creation of 216,000 jobs in December, alongside a questionable assertion about consumer prices rising at an annual rate of merely 3.4 percent. Treasury Secretary Janet Yellen quickly declared this a sign that the U.S. economy has experienced a “soft landing,” adding her hope that this trend will remain.
However, Yellen failed to disclose that employment figures for October had been revised down by 45,000 jobs, and November was adjusted down by another 26,000. This means a total of 71,000 jobs that were supposedly created didn’t exist.
So how many of the 216,000 jobs reported for December will turn out to be fictitious?
Moreover, Yellen overlooked that 52,000 of the reported jobs are in government, 59,000 are in health care and social assistance, and 22,000 are in food services. These types of positions generally do not contribute to the creation of new wealth and abundance within the economy.
Furthermore, around 4.2 million workers are employed part-time for economic reasons, indicating they want full-time positions but are constrained to part-time work due to cut hours or lack of available full-time jobs.
Additionally, there are 8.5 million individuals holding multiple jobs, working more than one position simply to make ends meet.
Clearly, Yellen is uninterested in these troubling details. Instead, she seems focused on presenting manipulated data to arrive at an unemployment rate of 3.7 percent, which she uses to boast about her success in guiding the economy towards a soft landing.
So, what is truly happening? To illustrate this, let’s delve into a personal anecdote followed by some insights…
Burning Ambition
Your editor’s son, currently a junior in high school, earns $12.50 per hour working at a pizza place in the local mall. This is significant considering that Tennessee’s minimum wage stands at $7.25 per hour.
Notably, he is the only high school student at this establishment; all his coworkers are in their thirties, some balancing children and multiple jobs. While we haven’t spoken directly to them, it’s likely none would describe their situation as ideal.
Online reviews of the pizza joint paint a grim picture, highlighting below-par pizzas and unsatisfactory customer service. Here are a few recent comments:
“Walked up to ask when they open. Some jerk behind the counter with a ponytail goes, ‘Lights out not open!’ with a ton of attitude. It was incredibly rude. Don’t go here!”
“If you’re on a quest for the worst pizza in Knoxville, come to this place—stale crackers topped with cheap ketchup and burnt pepperoni!”
“I tried to get a different slice, but he told me they would all be burnt. He was pretty sarcastic about it.”
With over a hundred reviews echoing similar sentiments, it’s evident that poor service seems widespread. While experiencing “burnt pizzas” and attitude has become common, true “burning ambition” is becoming scarce.
So, what’s the takeaway here?
Cherry Picking Data Durations
The low-wage service jobs that Yellen highlights are filled by individuals with minimal skills. While these positions serve a purpose—such as providing access to affordable pizza—they do not drive economic advancement. They fail to offer workers the skills or the higher wages necessary to compete internationally.
One of Yellen’s main talking points is that wage growth exceeds inflation. She cites the December report to back up her claim.
According to government data, hourly earnings rose by 4.1 percent over the year ending in December, while consumer price inflation was reported at 3.4 percent. Here’s Yellen’s statement:
“Wage increases are running over price increases now. American workers are getting ahead, and the progress for middle-income families is apparent.”
However, selectively choosing data periods to support a false narrative is a long-standing tactic among government officials. The truth is that during Yellen’s tenure, American workers have consistently fallen behind.
Looking at data from December 2020 to the present presents a different picture. As noted by David Stockman, former Director of the Office of Management and Budget, “the cost of living has risen 25 percent more than the average hourly wage.”
This means American workers have effectively experienced a substantial pay cut over the past three years.
Yellen’s Bald-Faced Lies
For context, Yellen has held multiple influential roles within the Federal Reserve and Treasury over the last three decades, contributing to an era marked by unprecedented economic interventionism.
Yellen and her colleagues have played a pivotal role in the wage depreciation witnessed in recent years. As Stockman elaborates:
“A few years ago, when the core PCE deflator was significantly below the Fed’s 2.00% inflation target, they promoted a policy aimed at averaging 2.0% inflation over time, intentionally restricting the defined measurement period.
“The Federal Reserve’s flexible average inflation targeting (FAIT) means they won’t tighten monetary policy even if inflation exceeds 2%. This flexible approach allows them to manage employment mandates with fewer constraints.”
“Interestingly, the Fed adopted this ‘averaging’ strategy in August 2020, just before inflation surged to levels not seen since the 1970s.”
The disconnect between the reality of rising consumer prices versus stagnating wages reveals a need for constant misrepresentation from government officials. Yellen, in particular, excels at presenting skewed data to make misleading assertions.
The actual intent behind her statements remains unclear—whether she genuinely believes the narratives she promotes or aims to mislead the public. Nonetheless, this facade is rather tiring.
[Editor’s note: In today’s economic climate, discovering unconventional investment strategies is vital. Learn how to safeguard your wealth and financial privacy with the Financial First Aid Kit.]
Sincerely,
MN Gordon
for Economic Prism
