If you watched President Joe Biden’s remarks on the January jobs report, you could be forgiven for believing that a great feat that “never happened before” had just actually happened. You could be forgiven for believing all his platitudes about working families getting more of what they need, despite inflation not seen since the early 1990s. The problem for Biden and his plummeting approval rating is that his remarks are, at best, a rose-tinted view of reality.
A closer look at the jobs report reveals some concerning data. As the economy continues to recover from the COVID-19 lockdowns, we would expect that smart government policy would foster growth in private sector jobs. Unfortunately, this jobs report shows a reduction in private employment of some 300,000 jobs. Despite this administration’s claims to be laser-focused on “buy American” and repatriating the supply chain, this is a serious blow to the recovery.
In fact, the drop in private employment from December 2021 to January 2022 in this report is the largest decline in private employment during the recovery. This might explain White House press secretary Jen Psaki’s bizarre comment that 9 million workers had called in sick during January and thus there would be fewer people employed. They knew the private employment numbers were going to look bad.
So what explains the increase of 467,000 jobs in January trumpeted by Biden?
A massive, unprecedented increase in government jobs at all levels. Federal, state, and local governments hired nearly 768,000 new employees between December 2021 and January 2022. With the exception of massive government hiring in July and August of 2020 thanks to the CARES Act, there has not been an increase in government employment this large going back to May 2002, when the data became available.
This is not to say that government jobs are not important or that there are not generally good reasons for an increase in government jobs at times. Especially at the state and local levels, government jobs provide vital services to the public. However, the decline in private employment, coupled with high inflation, is indicative of some serious problems with economic fundamentals. Piling on more government jobs will only further burden the struggling recovery.
The decline in private employment alongside the massive increase in government employment does not bode well for average people.
Jobs reports can be juiced with government hiring. GDP reports can be stuffed with government spending financed by yet more borrowing. None of this changes the underlying reality: The 1970s-style stagflation we are experiencing is not likely to be addressed by the Biden administration.
Levi Russell is an assistant teaching professor at the Brandmeyer Center for Applied Economics at the University of Kansas and a fellow at the Leonine Institute for Catholic Social Teaching. You can email him at [email protected].
