By Chris Talgo
This week, the Bureau of Labor Statistics issued its 2024 Preliminary Benchmark Revision, which shows that the U.S. economy created 818,000 fewer jobs than has been reported in the 12-month period from April 2023 to March 2024.
Make no mistake, this is far from a routine rounding error. In fact, it is the largest downward revision in 15 years.
To put the sheer enormity of this miscalculation into context, consider that the surprise downward revision means that 30 percent of the 2.9 million jobs supposedly created over the past year never existed.
Or, in other words, instead of creating a fairly robust 242,000 jobs per month over the past year, the economy has actually added 174,000 per month.
Unfortunately, the revised jobs report is far from the only troubling economic signal to emerge in recent months, foretelling the U.S. economy is not nearly as strong as many would have you believe.
Another very worrisome statistic that has not received nearly enough attention in the mainstream media is the number of U.S. businesses going bankrupt. According to S&P Global, “June marked a historic surge in US corporate bankruptcy filings, with the highest number recorded in a single month since at least the start of 2020 and surpassing half-year figures seen in over a decade.”
Even worse, as The Wall Street Journal reported in late April, small-business bankruptcies have surged by nearly 80 percent over the past year. In February alone, 213 small businesses filed for bankruptcy.
The primary reason that both large and small businesses are going under at near record rates can be attributed to the fact that U.S. consumers simply do not have the disposable income that they did just a few years ago.
The vast majority of Americans are struggling to make ends meet. Nearly 80 percent of Americans are living paycheck-to-paycheck.
Moreover, most Americans are up to their eyeballs in debt. According to the Federal Reserve Bank of New York, total household debt now stands at a whopping $17.8 trillion. Specifically, “Mortgage balances were up $77 billion to reach $12.52 trillion, while auto loans increased by $10 billion to reach $1.63 trillion and credit card balances increased by $27 billion to reach $1.14 trillion.”
Of course, the main reason that Americans are drowning is debt is due to the steep rise in prices that has occurred throughout the economy since the Biden-Harris administration went on an unprecedented spending spree. From the gargantuan $1.9 trillion American Rescue Plan to the bloated $1.2 trillion bipartisan infrastructure law, the Biden-Harris administration has unleashed trillions in helicopter money that has directly led to stubborn inflation.
While flooding the economy with trillions of dollars in unnecessary and inflationary spending, the Biden-Harris administration has also handicapped U.S. energy production, particularly regarding fossil fuel production, which has compounded inflationary pressures.
Although the Biden-Harris administration claim that natural gas and oil production are at record highs, that should be taken with a grain of salt because were it not for the administration’s anti-fossil fuel energy posture, the United States would be producing far more of each energy source.
As all economists know, energy is the mother’s milk that facilitates almost all economic activity. Therefore, when energy prices rise steeply, as has occurred throughout the Biden-administration, it has ripple effects throughout the economy.
For the past few years, President Joe Biden and Vice President Kamala Harris have repeatedly championed their administration’s record job numbers. However, those numbers also warrant further scrutiny.
Aside from the massive downward revision released recently, most of the jobs created over the past three-and-a-half years are not good-paying, career-oriented jobs. Rather, they are mostly low-paying, part-time jobs in the hospitality industry and government jobs that do little to spur innovation and increase entrepreneurship.
Perhaps most ominous, the vast majority of the new jobs created under Biden-Harris have gone to immigrants, both legal and illegal. As the Center for Immigration Studies notes, “there were only 971,000 more U.S.-born Americans employed in May 2024 compared to May 2019 prior to the pandemic, while the number of employed immigrants has increased by 3.2 million.”
Over the past three-and-a-half years, the American people have been gaslit by the government and mainstream media concerning the state of the U.S. economy. Despite this deceitful effort, most Americans are well aware that the economy is in very poor shape.
According to a recent Pew Research Center poll, only 23 percent of Americans rank the economy as “good” whereas 36 percent say “poor” and 41 percent say “fair.” In terms of future expectations, things are just as gloomy. Only 23 percent of Republicans and 26 percent of Democrats expect the economy to improve over the next year. On the other hand, nearly 40 percent of Republicans and 25 percent of Democrats expect the economy to worsen over the next 12 months. Given the terrible jobs news, huge rise in businesses going bankrupt, and ever-climbing consumer debt, I think they might be onto something.
Chris Talgo (ctalgo@heartland.org) is editorial director at The Heartland Institute.