Here’s Why The Economy Isn’t Out Of The Woods Just Yet

Here’s Why The Economy Isn’t Out Of The Woods Just Yet

By Alfredo Ortiz |

Friday’s jobs report is not the home run that Democrats and the mainstream media claim. In their rush to champion topline job creation, they overlook how the jobs report is actually made up of two surveys. And the other doesn’t look so good, though it’s far more reflective of the economic reality facing ordinary Americans and small businesses.

The Bureau of Labor Statistics surveys business establishments and households each month to generate its report on labor market conditions. The establishment survey of payrolls produces the monthly job creation number the media is quick to champion. Yet even the BLS admits the household survey is “more expansive” because it also measures self-employed workers and those employed privately in households. This survey produces the unemployment rate.

For years, these surveys have tracked each other in terms of employment growth, as you’d expect. However, beginning in mid-2022, they began to diverge, with the payroll survey showing far more job creation than the household survey. Over the last year, the payroll survey finds 2.9 million jobs have been created, while the household survey reveals only 1.1 million new jobs.

In stark contrast to the 353,000 jobs created in the payroll survey, the household survey shows employment actually declined by 31,000 last month. Full-time jobs declined by 63,000. That’s a far cry from today’s headlines about a booming economy.

These household survey numbers are in line with other anecdotal and empirical data. On Thursday, the job placement firm Challenger, Gray and Christmas reported a historic 82,300 layoffs in January. This week, UPS announced 12,000 layoffs. Major companies such as Zerox, Spotify, and Hasbro have recently laid off at least 15% of their workforce. There’s also a jobs bloodbath currently occurring in the media sector.

On Wednesday, ADP reported that only 107,000 private-sector jobs were created in January.

There are other technical problems with the jobs report. Seasonal adjustments and annual revisions to population estimates have made January jobs reports notoriously untrustworthy. I can’t understand why we need opaque “seasonal adjustments” to the job numbers at all. Americans are smart enough to understand that job creation will be higher in some months and lower in others for seasonal reasons. We don’t need green eyeshades smoothing them for us.

Bipartisan tax cut legislation passed this week in the House of Representatives can turbocharge job creation in both surveys in the months ahead. The legislation, brokered by House Ways and Means Chairman Jason Smith (R-MO), extends key tax cuts passed as part of the Tax Cuts and Jobs Act in 2017, making it easier for small businesses to invest, expand, and hire.

This legislation is overwhelmingly supported by Main Street, with small businesses calling the immediate expensing provision “a game-changer.” The Senate should quickly pass this legislation and send it to President Biden’s desk to be signed into law.

In the meantime, let’s see if the payroll and household surveys continue to diverge in the jobs reports ahead. If they do, it will be more confirmation that the economy is not out of the woods yet.

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Originally published by the Daily Caller News Foundation.

Alfredo Ortiz is a contributor to The Daily Caller News Foundation, president and CEO of Job Creators Network, author of “The Real Race Revolutionaries,” and co-host of the Main Street Matters podcast.

As Small Business Owners Struggle To Find Employees, Leaders Look To Improve Desire For Jobs

As Small Business Owners Struggle To Find Employees, Leaders Look To Improve Desire For Jobs

By B. Hamilton |

This month’s jobs numbers report, showing a dismal 266,000 jobs added last month to the nation’s economy, has not surprised small business owners. School closures, erratic school schedules in states allowing students to return to the classroom, and nonstop unemployment benefits have kept potential employees home, studies show.

Just the day before the national numbers came out, the National Federation of Independent Business (NFIB) released its Jobs Report and its latest numbers confirm that there is a dearth of ready-to-work employees.

According to the NFIB report, a record 44% of all small business owners say they have job openings they could not fill, 22 points higher than the 48-year historical average, and two points higher than the 42% figure from March.

April is the third consecutive month with a record-high reading of unfilled job openings among small businesses, according to NFIB.

Even though most experts believe unemployment payments are suppressing the job pool, State Rep. David Cook of Globe has been pushing an increase in weekly benefits.

The federally-established Unemployment Insurance Benefits Program, administered by DES according to state law, provides unemployment benefits to persons unemployed through no fault of their own for up to 26 weeks and up to $540 per week or $2160 per month in untaxed paid benefit. During the COVID-19 crisis, beneficiaries did not have to prove they were actively looking for work.

That changed this week when Governor Ducey rescinded a March 2020 Executive Order that waived the requirement that an individual receiving employment benefits must be actively looking for work to receive the benefits.

Other governors are getting more aggressive in getting residents back to work. Montana Governor Greg Gianforte, citing a workforce shortage, announced he will use funds from the American Rescue Plan to incentivize people to become employed.

“While small businesses are glad to see Gov. Doug Ducey re-instating the active work search requirement to qualify for continued state unemployment benefits, more work needs to be done to get able workers off the unemployment rolls and back into one of the many available jobs in the private sector,” said Chad Heinrich, NFIB’s Arizona state director in a press release. “With April also setting a new 12-month high in small businesses raising wages, and a full one-fifth of additional owners planning future wage increases, hopefully, the private sector will soon be able to compete with the overwhelming price the federal government is paying able-workers to sit on the sidelines.”

NFIB Chief Economist Bill Dunkelberg says the “tight labor market is the biggest concern for small businesses who are competing with various factors such as supplemental unemployment benefits, childcare, and in-person school restrictions, and the virus. Many small business owners who are trying to hire are finding themselves unsuccessful and are having to delay the hiring or offer higher wages. Some owners are offering ‘show up’ bonuses for workers who agree to take the job and actually show up for work.”

On Friday, Ducey made a move to bring some relief on the childcare front by providing an additional $9 million in aid for child care providers throughout the state.

“Parents and families need access to safe, reliable, and high-quality child care, especially as Arizonans go back to work and job opportunities expand,” said Ducey. “With the additional funding announced today, we’re making sure more working families have access to that care. I’m grateful to all Arizonans working to ensure families and kids have the support and resources they need and am proud to celebrate Child Care Provider Appreciation Day.”

The CCWRR Grant Program provides immediate support to child care providers in hiring qualified staff and retaining existing staff. This grant program will help all regulated child care providers with recruitment and retention costs to support the child care workforce in Arizona. These funds are made available to Arizona through the Child Care and Development Fund CARES Act, 2020.

Child care centers and group homes must use grant funds for salaries and benefits for employees, and bonus incentives for hiring and retention. Group homes and family child care homes without staff, grant funds may be utilized for a variety of expenses including licensing fees, liability insurance, tuition and registration relief for families, lease and mortgage payments, utilities, classroom materials, and supplies.

While child care providers must apply and attest that they are open and providing child care services at the time of application and for the duration of the grant, grants are not competitive. Grant awards will be paid in one sum amount, with the distribution of payments initiated on June 24, 2021. Child care providers will have until September 30, 2021, to spend the grant funds.

In addition to the CCWRR Grant, the Department has also extended the Essential Workers Child Care Relief Scholarship through June 30, 2021, allowing essential workers and child care providers access to vital child care.