Posted originally on the conservative tree house on September 3, 2021 | Sundance | 157 Comments
The Bureau of Labor Statistics has released the August jobs report [Data Link Here] showing only 235,000 jobs created in August. Economists and financial analysts were predicting 750,000+.
While the financial punditry are jaw-agape with disappointment, these results are in line with the background data and should not have been a surprise. Within the BLS data you will note the retail sector lost 29,000 jobs, and the leisure and hospitality sector remained unchanged.
Massive inflation and price increases in fuel, gasoline, energy costs and food pricing is slowing down retail purchasing of non-essential goods. The working class are cutting back non-essential purchases and focusing on how to pay for groceries, electricity and gasoline. Connected to this checkbook issue, the working class are not spending on leisure and hospitality. Everyone is focused on making ends meet. Spending decisions are prioritized.
The government COVID subsidies have also created a false bottom. Service sector workers could make more money from COVID bailouts than they could by returning to work. Some families made the decision to stay home, drop the daycare cost for their kids, and actually net a higher overall income position from government relief funds. This dynamic is mostly noted in the lower tier of the income and wage earning employment category.
Government run education, local and state, also saw a drop in jobs of -26,000 simultaneous to kids returning to school. Why did this happen? Well, private sector education gained +40,000 jobs. This is in line with the cultural shift. There is so much COVID propaganda, and manipulation of teaching outcomes as a result of unionized education dictates around COVID, many parents have had enough with the nonsense, mask mandates and indoctrination and are taking their kids out of public schools.
We have yet to see the issues of low wage growth and higher costs-of-living hit the housing sector, but it will come. On a macro level mid-range home values peaked, then plateaued in late May and early June. New home construction has slowed significantly. These issues are all connected to a very serious drop in real wages. The current paychecks of the middle-class cannot keep pace with inflation, the result is less net income…. which means less spending…. with means less jobs in sectors that benefit from consumer spending.
Yes, there are regional housing markets with home/property values increasing. Not coincidentally, those markets are in the regions where COVID freedom is highest and government restrictions on the economy are lowest. However, on the overall macro level the housing/property values are flat now. People are hunkering down, making ends meet and having kitchen table conversations about spending priorities.
Remember, two-thirds of the U.S. economy is dependent on consumer spending. When consumer spending contracts, because worker wages are eaten up by price increases on unavoidable essential goods, the economy overall begins to stall out. This outcome of “stagflation” is the primary reason why so few jobs were created in August.
COVID will be blamed, but the root issue is massive inflation combined with government spending… which creates lower dollar values….. which creates even more inflation.
During our previous discussion on historic, predictable and purposeful food inflation, on August 13th CTH noted, “BigAg has likely already made deals for increases in government welfare payments (EBT and Foodstamps, WIC etc.). BigAg lobbies congress for higher reimbursement rates so they can raise the prices of food and export domestic product to other nations. Food assistance payments increase, and BigAg benefits. In essence, BigAg takes the fed food subsidies and fattens their profit margin. Then, they payback the politicians. It’s a circle of money.“….
If you know how the game is rigged, it’s actually easy to predict the background. A few days later, exactly on cue, several media outlets began reporting that Joe Biden was going to increase the amount of food stamp assistance by 25% per recipient, and expand the program.
New York Times – WASHINGTON — The Biden administration has revised the nutrition standards of the food stamp program and prompted the largest permanent increase to benefits in the program’s history, a move that will give poor people more power to fill their grocery carts but add billions of dollars to the cost of a program that feeds one in eight Americans.
Under rules to be announced on Monday and put in place in October, average benefits will rise more than 25 percent from prepandemic levels. All 42 million people in the program will receive additional aid. The move does not require congressional approval, and unlike the large pandemic-era expansions, which are starting to expire, the changes are intended to last. (read more)
This announcement is actually revealing in more ways than just the predictability of it.
♦ First, the 25% permanent increase is an admission by the Biden administration that food price inflation is here to stay. The massive scale of the increase also highlights the actual reality of how much food prices are rising. This massive and permanent increase directly undercuts the previous White House and Biden claims that inflation was “temporary”, “transitional” and likely to end soon.
However, to that point… remember, in order for leftist ideologues (Alinskly types) to continue advancing their ideological belief systems they have to pretend not to know things. They pretend not to know inflation is higher than it is, because they must continue making claims that are counter to the reality around us.
♦ Second, no massive increase for those on fixed-income social security. This does not go unnoticed and should anger everyone who is seeing their standard of living crushed by these insane Biden fiscal, monetary and economic policies.
♦ Third, now you can see the fingerprints of the background quid-pro-quo that led to the GOPe DeceptiCons agreeing to the massive “infrastructure spending bill.” I can guarantee you McConnell, Thune, Barasso, Ernst, Grassley and crew (all farm states with Big Ag lobbying money) already knew this massive hike in foodstamp and SNAP assistance was coming. This was the deal that bought their votes. This is what the DeceptiCons got out of it.
Part of the lobbying in the food industry by BigAg multinationals is to advocate for the expansion of U.S. taxpayer benefits to underwrite the costs of the domestic food products they control. By lobbying DC, these multinational corporations get congress and policy-makers to expand the basis of who can use Food Stamps, EBT and SNAP benefits (state reimbursement rates). Expanding the federal subsidy for food purchases is part of the corporate profit dynamic.
With increased taxpayer subsidies, the food price controllers (BigAg Multinationals) can charge more domestically and export more of the product internationally. Taxes, via subsidies, go into their profit margins. The corporations then use a portion of those enhanced profits in contributions to the politicians. It’s a circle of money.
THINK COMMON SENSE – If Joe Biden and crew thought the economy was genuinely going to grow; and if the Biden administration really planned on creating jobs; the administration would not be raising welfare payments. They are not shocked by poor jobs numbers because their policies specifically create poor jobs numbers. They know this. These are not people acting accidentally or stupidly. The JoeBama crew is intentionally expanding the welfare state.