On Friday’s episode of the Peter Schiff Show, Peter tackles the Bureau of Labor Statistics’ most recent jobs report, which came out early Friday. The report, which purportedly supports the narrative of a strong economy, is not as positive as the media suggests. Peter takes most of this episode to explain why.
First, he defines the stakes of this report. Since it’s the last report that will receive a full news cycle before the election, it will hold the most sway in voters’ minds:
“This is the second to last jobs report that we’re going to have before the election in November. But for all practical purposes, it’s kind of like the last report. …The media will have a couple of days to kind of hype that report up. But this report is going to be what defines the media coverage over the next month. … Given how high the stakes are for this jobs report, it means there’s a lot of pressure on a highly political labor department to come up with a positive number.”
The report’s unemployment figure declined slightly, but Peter believes part of the change is driven by part-time workers picking up multiple jobs– a sign of an economically stressed working class:
“The unemployment rate that gets a lot of media attention, the official U3 rate, went from 4.2% down to 4.1%. So now Harris is going to be able to talk about this falling unemployment rate. But once again, the devil is in the details when it comes to the jobs report. The quality of the jobs, again, is not there. Even according to the official numbers, the biggest category they reported was in leisure, hotels, and bars—waiters and bartenders. … I think a lot of them are part-time jobs that went to people who need second and third jobs.”
More important is the distinction between public and private jobs. In contrast to jobs maintained by the private sector, government jobs can persist even when they create no social or economic value:
“The private sector jobs are not the responsibility of the taxpayer. They’re created by the profitability of the employer. And how is that profit derived? It’s because those workers are helping to provide goods and services that consumers want, value, and are willing to voluntarily pay for. … But government jobs are a completely different animal. They’re not paid for by the profits of the employer, because the employer has no profits—the employer is the government. Where does the government get the money to pay its workers? From us, the taxpayers. Whether we want the services or not, whether we use the services or not, we have to pay for them.”
The other big news from last week is the temporary end of the International Longshoremen’s Association strike that threatened to devastate industries reliant on maritime shipping. Peter compares the workers’ compensation demands to minimum wage laws, noting that both heavily incentivize automation by artificially increasing the cost of labor:
“They know that at the Longshoremen’s Union, they realize that this 62% pay hike is a big number. And that’s going to mean a lot of the analysis these ports are doing (‘Should we invest in automation and fire all of these workers?’) maybe pencils out. So now they’re trying to prevent the employers from doing what they normally would do based on a wage scale that is unreasonably high.”
Peter also mentions an illustrative case of the government clamping down on alternative money under the pretense of “stopping illegal activity.” Israel is the most recent country to propose doing this, likely because its fiat currency is suffering under a wartime economy:
“I read stories that Israel is trying to clamp down on tax evasion or money laundering and is talking about outlawing the ownership of gold and silver in Israel. That would be a disaster if that were to happen. That would be one of the consequences of this war that’s going on, where the government inflicts unnecessary damage and the terrorists win because the government uses the threat of terror to further diminish individual rights. … Whatever the government tells you not to do, that’s exactly what you need to be doing. It’s what they encourage you to do that you need to reconsider.”
If you missed it, also check out Friday’s episode of the Gold Wrap Podcast, where Joel and JD also discuss the jobs numbers and Goldman Sachs’ $2900 price target for gold.
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