- Watch The JD Rucker Show every day to be truly informed.
In another sign of weakness for the job market, the total number of employed persons in the United States fell, month over month, in October. That’s the third time in the last seven months this total has fallen, dropping to approximately 158 million.
According to new employment data released by the Bureau of Labor Statistics on Friday, the current population survey shows 328,000 fewer people were employed in October than in September, seasonally adjusted.
This continues a seven-month trend in which the total number of employed persons has moved sideways. From March 2022 to October, total employed persons has only increased by 150,000 people, rising from about 158.45 million to 158.6 million. With October’s drop, this also puts total employment in October below the peak of 158.8 million in February 2020. In other words, the household survey shows there are fewer employed people now than before the Covid Panic.
Moreover, the household survey also showed that the total number of unemployed workers increased by approximately 250,000 people from September to October. That’s an 8-month high.
The decline in total employed was driven by a fall in full-time workers. The survey shows that in October full-time workers dropped by 433,000 while part-time workers increased by 164,000.
Yet, the headlines in the business press today told us that “U.S. payrolls grew by 261,000 October” and that “total employment” is now 800,000 jobs above the February 2020 peak.
Those numbers come from the “establishment survey” which differs from the household survey in that the establishment survey measures jobs. The household survey measures workers. Historically, the two numbers often track together, but there is a sizable gap between the two numbers in recent months. That is, since January, total jobs has grown considerably—showing an increase of 3.5 million jobs. Yet over that same time, the household survey has shown an increase of only 1.4 million employed persons. In other words, the two surveys together suggest much more growth in jobs than actual workers with jobs.
One conclusion we can draw here is that more people are working second jobs to make ends meet. This would make sense given what other information we have about the state of household finances at the moment.
For example, according to the bureau of economic analysis, disposable income is lower now than it was before the Covid Panic, coming in at $15,130. That sum was $15,232 during February of 2020. Meanwhile, the personal savings rate in September fell to 3.1 percent. That’s the second-lowest level since 2007. Credit card debt, in contrast, reached new highs in September, and is now well above its previous 2020 peak.
Workers and consumers are likely spending down whatever savings they have because wages, in spite of what the allegedly “robust” establishment-survey jobs numbers say, are not keeping up with price inflation. Since April 2021, CPI inflation has repeatedly outpaced growth in average hourly earnings, year-over-year. In September, wages grew by 5.12 percent, but the CPI grew by 8.2 percent (year over year). The latest jobs numbers show these hourly earnings are up by 4.86, but price inflation is going to have to come down a very long way for real wage growth to materialize again.
All of this combines to suggest that households are facing some real struggles in terms of dealing with rising expenses, and the need for more income. For example, CNBC reported last month that more Americans are living paycheck to paycheck:
As rising prices continue to outpace wage gains, families are finding less cushion in their monthly budget.
As of September, 63% of Americans were living paycheck to paycheck, according to a recent LendingClub report — near the 64% historic high hit in March. A year ago, the number of adults who felt strained was closer to 57%. …
“Being employed is no longer enough for the everyday American,” [Anuj] Nayar said. “Wage growth has been inadequate, leaving more consumers than ever with little to nothing left over after managing monthly expenses.
A recent study from Moody’s analytics also concludes that the average American household paid $445 more for basic goods and services in September, compared to September of last year.
Nor is the news likely to get much better. There is growing evidence that the United States—if not already in recession—is headed toward one. For one, the first two quarters of 2022 showed negative growth. The third quarter showed some growth, but that was largely driven by a one-time narrowing in the trade deficit and by government spending. Even with reports of third-quarter growth, CNBC admits that a recession is coming with economist Paul Ashworth concluding “Exports will soon fade and domestic demand is getting crushed under the weight of higher interest rates.”
The other big factor pointing toward recession is the yield curve, which has now inverted, pointing to a coming recession. In fact, inversions in the yield curve have a perfect record of predicting recessions in recent decades. As of last week, the spread between the 10-year and the 3-month Treasurys is now negative. The same thing happened in May of 2019, July of 2006, and July of 2000. There can be a lag of six months or more in these cases, but the result has been the same: recession.
The Biden Administration and the Federal Reserve both continue to cling to jobs data as evidence that the economy is “strong.” As we’ve seen, though, most of the employment data actually points to stagnation or even losses in terms of employed persons. So, the the-economy-is-great crowd clings to the small slice of the employment data that is the establishment survey suggesting that all is well. If there is an upside to this, it’s that the job-growth-is-strong narrative has provided some cover to the Federal Reserve which is far, far behind the curve on ending its inflationary easy-money policies. Thanks to the Fed’s refusal to reverse course on its ultra-low interest rate policy until the economy was already clearly headed toward 40-year highs in price inflation, the Fed now faces a stagflationary crisis if it cannot get price inflation down before a recession becomes obvious. After all, as the jobs data becomes worse, this will increasingly trigger an avalanche of political pressure to “pivot” and start “stimulating” the economy once again.
There’s no telling at this point if the Fed has the stomach for actually bringing price inflation down and truly abandoning its 13-year long era of ultra-easy money and so-called unconventional monetary policy. It’s far more likely that the Fed will return to suppressing interest rates just as soon as it can claim any sort of “victory” over price inflation, no matter how minor. This aborted retreat from the Fed’s ongoing inflationary experiments would likely send the US toward something at least as bad as 1970’s-style stagflation.
About the Author
Ryan McMaken (@ryanmcmaken) is a senior editor at the Mises Institute. Send him your article submissions for the Mises Wire and Power and Market, but read article guidelines first. Ryan has a bachelor’s degree in economics and a master’s degree in public policy and international relations from the University of Colorado. He was a housing economist for the State of Colorado. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.
Image by www_slon_pics from Pixabay. Article cross-posted from Mises.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
