President Joe Biden continues to tout misleading statistics meant to convince voters that his administration has led to the creation of millions of U.S. jobs.
Meanwhile, the Federal Reserve and other influential entities are preparing Americans for widespread job losses they say are necessary in order to combat the runaway inflation that has dominated the first two years of Biden’s presidency.
The latest Department of Labor report suggests that the red-hot post-pandemic labor market is already beginning to cool down as the number of new unemployment benefit claims jumped more than expected.
According to data released on Thursday, last week ended with 13,000 new initial claims for a total of 196,000 — or about 6,000 more than economists had predicted. Some of that increase was directly tied to ongoing layoffs in the technology sector.
The previous week saw 38,000 more Americans receive assistance after their first week of unemployment benefits, pushing the total number to nearly 1.7 million.
Unemployment Insurance Weekly Claims
Initial claims were 196,000 for the week ending 2/4 (+13,000).
Insured unemployment was 1,688,000 for the week ending 1/28 (+38,000).https://t.co/ys7Eg5LKAW
— U.S. Department of Labor (@USDOL) February 9, 2023
Some evidence suggests that the number of layoffs has remained artificially low thus far in the economic slowdown because some companies are worried that they will have trouble finding new workers to fill those positions when the labor market rebounds.
Employees have had the upper hand over the past year as many industries struggled to recruit enough workers. As recently as last month, the Institute for Supply Management cited evidence from a survey that found hiring managers and executives still believe “supply is thin” when it comes to “qualified labor.”
With layoffs becoming more commonplace and the threat of a long-term recession still hanging over the U.S. economy, however, that trend is likely to reverse this year.
Economist Lou Crandall explained that his team at the Wrightson ICAP research firm is expected “the reported level of [unemployment] claims to be revised up when the annual seasonal factor revisions are published this spring.”
As Federal Reserve Chairman Jerome Powell explained in September, efforts to bring down consumer prices will necessitate “some softening of labor market conditions,” which is a euphemism for rising unemployment.
The central bank has indicated that the unemployment rate will probably hit 4.4% this year, which equates to well over a million Americans losing their jobs.