Editor’s note: This is a lightly edited transcript of the accompanying video from professor Peter St. Onge.
Last week, we got another stunning employment report.
The finest money can buy.
So stunning, in fact, that it had Federal Reserve watchers fretting that maybe the Fed cut rates too early—a so-called policy error.
As in, the economy’s still too strong and needs more choking by the Fed—what, with jobs waking up at their own funeral, jumping out of the casket, and dancing with the catering girl.
Well, it turns out that stunning jobs report had a secret ingredient: government workers.
A lot of them. 785,000, to be precise. On the month.
Another couple months like that and our entire economy will be government workers regulating
each other, sustained in their work-from-home colonies by flitting Amazon delivery guys.
By the way, 785,000 is the highest monthly jump in government workers on record.
And it brings government workers to a crisp 22,216,000—roughly twice manufacturing employment.
For perspective, in 1950, there were three manufacturing workers per government worker. Today that’s flipped. In fact, it’s flipped six-fold.
Of course, very few of those 22 million government workers are available for hurricane duty in North Carolina. All while there’s a good chance the laid-off manufacturing guys would have been trucking in volunteer supplies if they could afford gas.
In the immortal words of Kendrick Lamar, “They not like us.”
Thanks to Zero Hedge for finding the government numbers hidden in plain sight in both the Bureau of Labor Statistics’ household survey—which asks people if they have a job—and its establishment survey, which guesstimates from the handful of companies that bother reporting data to the government.
So, once we take off the government workers, it turns out productive jobs—private-sector jobs—grew by just 133,000.
I mentioned in a recent video how population growth soaks up between 175,000 and 200,000 jobs per year.
So, 133,000 isn’t even treading water—it’s losing ground. Which matches with other data saying the job market continues weakening—data from part-time and second jobs to job quits falling—both classic indicators of job distress.
Beyond the weak numbers, keep in mind it’s actually a lot worse if government workers are the cause.
Because, as North Carolina is painfully illustrating at the moment, not only will these brand-new government parasites not be producing anything, they’ll be destroying.
Like pouring salt on a garden, all these bright shiny government jobs will be collecting a salary to
harass, mandate, and tax productive jobs out of existence.
Meaning, we just hired roughly 785,000 parasites. Stunning job report indeed.
So, what’s next?
If stunning jobs are really just disguised government spending—and economy-destroying spending at that—this changes the math for the Fed.
Because it implies the real, productive economy—the thing that pays for all of it, including the Fed—is actually much worse than they think.
That suggests the Fed should have lowered rates long ago, to spread out the liquidation of malinvestments—the bankruptcies and layoffs—from the Fed’s previous easy money policies.
Instead, as in every recession, the Fed slammed the gas too long—$7 trillion and zero rates
during COVID-19.
Then it slammed the brakes too long with mega-rate hikes to choke the private economy so
government could spend.
And now that it’s finally bestirred itself once again, it’s slamming the gas.
This sets up the next boom-bust cycle—the one nobody will see coming around about 2032—yet it
comes too late to stop the recession that’s already on our doorstep.
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