The United States’s jobs recovery is extremely poor, especially if we consider the size of the monetary and fiscal stimulus and the spectacular upgrade to GDP estimates. After a massive consensus increase in GDP recovery estimates to 6.5 percent in 2021, no one should be cheering a 5.9 percent unemployment rate, 58 percent employment-to-population ratio, and, even worse, a 61.6 percent labor force participation rate that has remained stagnant for ten months. Furthermore, Bloomberg Economics shows that the United States unemployment rate would be 8.4 percent excluding the participation decline.
Article by Daniel Lacalle from Mises.
In the European Union, the employment situation is also a cause of concern. The United States’s jobs recovery is certainly strong only when compared with an extremely weak European jobs environment. In May 2021, the euro area’s seasonally adjusted unemployment rate was 7.9 percent, marginally down from 8.1 percent in April 2021. These figures, published by Eurostat, do not include the 6 million furloughed jobs that remain in the European Union. Eurostat estimates that 15.278 million men and women in the EU, of whom 12.792 million are in the euro area, were unemployed in May 2021. Compared with May 2020, unemployment rose by 949,000 in the EU and by 803,000 million in the euro area. Despite a strong recovery in the purchasing managers’ index (PMI), the employment component remains poor. Euro area unemployment rate would be closer to 11 percent including furloughed jobs.
The disappointing jobs recovery should also be analyzed in the context of the largest fiscal and monetary stimulus in decades. No one can seriously consider these job figures as positive in the middle of trillions of dollars of deficit spending and monetary stimulus. The Keynesian so-called miracle of government spending and central bank intervention has failed again.
We must also remember that these figures are happening in the middle of a better-than-expected recovery in the services sector, which tells us that the risk of a jobless recovery that we mentioned a few months ago is even clearer now.
We estimate that the unemployment rate and labor participation rate of 2019 will not be recovered in the United States until 2025 … if there is no financial or economic crisis in the process. Even worse, we believe that almost 30 percent of furloughed jobs in the European Union will not be absorbed even by 2025.
The slow jobs recovery is not something economists should simply ignore or underestimate. An artificial increase in GDP driven by debt and deficit spending and where job creation is so weak is also a recipe for a debt crisis in a stagnant economy where job creation may slow even more.
When the mirage of monetary and fiscal stimulus evaporates, we will likely see a return to the failed low-productivity growth and indebted model that defined the 2010–18 recovery, but with an alarming increase in government size and interventionism. More debt, less growth, and millions of people out of a job due to increased levels of intervention. The hilarious thing is that many will blame the poor recovery on capitalism and neoliberalism when all we are seeing is the result of massive government and public absorption of economic resources.
New Conservative Network Seeks Crowdfunding Help
They say we have to go big or go home. We’re trying to go big and bring the patriotic truth the the nation, but we need help.
Readers may or may not realize that over the past year, we’ve been bringing more conservative news and opinion outlets under our wing. Don’t take our expansion as a sign of riches; all of the “acquisitions” have been through sweat and promises of greater things to come for all involved. As a result, we’ve been able to bring together several independent media sites under a unified vision of preventing America from succumbing to the progressive, “woke,” Neo-Marxist ideologies that are spreading like wildfire across America.
The slow and steady reopening of America is revealing there was a lot more economic hardship brought about from the Covd-19 lockdowns than most realize. While we continue to hope advertising dollars on the sites go up, it’s simply not enough to do things the right way. We are currently experiencing a gap between revenue and expenses that cannot be overcome by click-ads and MyPillow promos alone (promo code “NOQ” by the way).
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