The Biden Boom Continued In February, But The Media Is All Doom And Gloom, Distorting Pubic Perception

The AP reported on Thursday, Fewer Americans apply for jobless benefits last week:

Fewer Americans applied for unemployment benefits last week reflecting a low number of layoffs across the economy.

Jobless claims fell by 18,000 to 215,000 for the week ending February 26, from 233,000 the previous week, the Labor Department reported Thursday.

The four-week average for claims, which compensates for weekly volatility, fell by 6,000 to 230,500.

In total, 1,476,000 Americans were collecting jobless aid the week that ended Feb. 12, a small uptick of 2,000 from the previous week’s revised number, which was its lowest level since March 14, 1970.

The Labor Department released its February jobs report on Friday. Employers added 678,000 jobs and the unemployment rate fell to 3.8%, in a blockbuster new jobs report that shows the U.S. economy was humming in the weeks before Russia’s invasion of Ukraine.

Bloomberg reports, U.S. Job Gains Accelerate While Wage Growth Slows Sharply:

U.S. hiring boomed in February while wage growth slowed, showing a strong labor market that likely keeps the Federal Reserve on track to raise interest rates this month while offering some respite from strong inflationary pressures.

Nonfarm payrolls increased 678,000 last month — the most since July — after upward revisions in the prior two months, a Labor Department report showed Friday. The advance was broad-based across sectors. The unemployment rate edged down to 3.8%, and average hourly earnings were little changed from the prior month.

Some of the sectors hit hardest by the pandemic saw strong job gains in February, including restaurants and health care. Professional and business services also advanced, while construction payrolls gained by the most since March.

The Bloomberg survey of economists predicted a 423,000 advance in payrolls and for the unemployment rate to fall to 3.9%.

Even though wage growth lagged expectations, strong hiring and the lower unemployment rate support the Fed’s plan to raise rates this month. Chair Jerome Powell reaffirmed that plan this week after Russia’s invasion of Ukraine, which has led to a surge in oil, metals and grain prices and clouded the U.S. economic outlook. He said he favors a 25 basis-point increase to kick off an expected series of hikes this year.

Labor demand is likely to continue to exceed supply, limiting the pace of job growth and putting upward pressure on wages. Friday’s report showed average hourly earnings were little changed in February and up 5.1% from a year ago, a deceleration from the prior month. The average workweek ticked up to 34.7 hours.The labor force participation rate — the share of the population that is working or looking for work — ticked up to 62.3%, and the rate for workers ages 25-54 rose to the highest since March 2020.

While improved, a combination of factors like child care challenges, Covid-19 concerns and early retirements have whittled down America’s workforce. Before the pandemic, the overall rate was over a percentage point higher.In testimony to lawmakers Wednesday, Powell noted the decline in labor force participation is “certainly something that’s now contributing to wage inflation and actual inflation and to the labor shortage that we’re currently seeing.” He also said the U.S. is “at least” at maximum employment, defined as the highest level that’s consistent with price stability.

We are not going to solve a labor shortage by people having more babies – that is an 18 year investment (which this country is unwilling to make) and does nothing to address the immediate labor shortage. The solution is what it has always been for the United Staes, immigration. And yet, Congress is not even seriously considering immigration reform because of unified white Christian nationalist Republican opposition.

Republicans are even opposed to Afghan refugees, those who worked with the U.S. during our 20 year war in Afghanistan, simply because they are Muslims (and thus automatically suspect as “terrorists” by Republicans). We are now in the early days of World War III in Eastern Europe. Ukrainians are white Christians (Eastern Orthodox), so there’s that; but they are also socialists, so that’s probably a deal breaker for Republicans. And the Party of Trump is the Party of Putin, “rootin’ for Putin” against the U.S. and our NATO allies.

In any event, the Biden Boom continues in the economy. The Coronavirus recession in 2020-21 was the steepest decline in employment since the Great Depression. Now Fed Chair Jerome Powell says “the U.S. is ‘at least’ at maximum employment.” This is a dramatic recovery, proving that Keynesian economics works.

And yet the lazy mainstream media keeps parroting the gloom and doom disinformation and propaganda of the conservative media entertainment complex that really wants people to believe that this is the worst economy in history for a partisan agenda. Not even close. Not even in my lifetime.

Paul Krugman writees today, America’s Very Peculiar Economic Funk:

[As] I’m sure many people can confirm, planes are flying full, while shops and restaurants are jammed. It definitely looks like a booming economy out there.

That’s also what the numbers say. In his State of the Union address, President Biden — while acknowledging that inflation has eroded wage gains — pointed to the 6.5 million jobs added last year, “more jobs created in one year than ever before in the history of America.” This claim was entirely correct.

Yet the public doesn’t believe it. According to a new survey by Navigator Research, only 19 percent of Americans believe that the U.S. economy is experiencing more job growth than usual, while 35 percent say that it is experiencing more job losses than usual.

This is the corrosive effect of the disinformation and propaganda pumped out daily by the conservative media entertainment complex and reflexively parroted by a lazy corporate mainstream media. Almost half the country lives in a conservative media bubble. This is why they mistakenly believe that the economy is in a recession (see below) and they are “rootin’ for Putin” against the U.S. and our NATO allies. WTF?

You might be tempted to say that ordinary Americans don’t pay attention to official statistics, that what matters is their lived experience. But what people are actually experiencing in their daily lives is a very strong job market. For example, according to the latest survey from the Conference Board, 53.8 percent of consumers said that jobs were “plentiful,” a near-record, while only 11.8 percent said that jobs were hard to get. And anyone who walks around U.S. cities can see the proliferation of help-wanted signs.

The survey results on the job market are, as I see it, the final nail in the coffin of attempts to deny that there’s something very peculiar going on with how Americans perceive the economy, that there’s a huge disconnect between economic reality, which is mixed — inflation is a big concern, but job growth has been terrific — and public perceptions, which are weirdly dismal.

It’s not just the dissonance between what people say about their own employment prospects and what they say about job creation. The same dissonance is clear, albeit in a more muted form, when we contrast what people say about their personal finances and what they say about the state of the economy.

According to the long-running Michigan Surveys of Consumers, a plurality of Americans say that their personal financial situation is better than it was a year ago. This is consistent with estimates suggesting that despite inflation most people saw rising real income in 2021. You can quibble with the estimates, but it’s clear that no major group is substantially worse off. And it’s worth remembering, for historical context, that blue-collar real wages declined steadily for most of the Reagan era, which didn’t stop voters from seeing that era as one of economic triumph thanks to strong job growth.

Yet if you ask people “How’s the economy doing?” as opposed to “How are you doing?” you get a very different answer: Economic sentiment has plunged.

You could argue that people hate inflation even when their incomes are keeping up, because it conveys a sense that things are out of control. And there’s surely something to that, although consumer sentiment is even worse than you’d expect given recent inflation.

But here’s another peculiar result from surveys: Long-run inflation expectations have stayed remarkably stable, suggesting that people don’t see things as being out of control. And again, inflation aversion can’t explain why people say that we’re losing jobs amid a huge employment boom.

So there’s something odd happening here, even if what it is ain’t exactly clear. [Reference to the Buffalo Springfield classic, For What It’s Worth].

My experience is that many people in the news media go ballistic when you talk about the disconnect between economic perceptions and actual performance, either because they imagine that it shows contempt for ordinary Americans or because they take it as an assertion that they aren’t doing their jobs [they aren’t]. In fact, I’m not at all sure what explains that disconnect. But it takes extraordinary intellectual contortions to deny that the disconnect exists.

And look, there’s plenty of evidence that public perceptions of society can diverge from reality. Even the Michigan Surveys have noted that economic perceptions are now hugely affected by partisanship. This is true for both parties, although the effect is stronger for Republicans, who feel worse about the economy than they did in June 1980, when unemployment was above 7 percent and inflation was 14 percent.

Or consider the case of crime. Crime rates have ticked up in the past few years, but this follows an epic decline between the early 1990s and the mid-2010s. Yet during the era of plunging crime, voters consistently told pollsters that crime was increasing. [It was, in the criminally corrupt Trump White House, which affected perceptions of crime.]

So what voters believe does not always reflect reality. [True Dat!] When Biden administration officials argue that they’ve done a better job on the economy than they get credit for, they have truth on their side.

And while I do not come here to bash the news media, I do feel that we’re missing a big part of the story if we take negative public views of the economy at face value without pointing out that they’re at odds not just with official statistics but also with self-reported experience. And we should try to understand where that disconnect is coming from.

While Krugman does not want to bash the corporate news media, I feel no such restraint. Most of the economics reporting you are seeing in the news media comes from reporters who never even took an Econ 101 class in college. They literally have no idea what they are talking about. If you think this doesn’t effect the quality of the economics reporting you are getting, you are sadly mistaken.

Ed Kilgore adds to Krugman’s analysis, The Economy Is Booming. Why Do Many Americans Think We’re in a Recession? (excerpt):

[T]his poll finding from USA Today and Suffolk University is kind of … surprising: “a 51% majority of those surveyed say the economy is in a recession or a depression, the gloomiest outlook in six years.”

According to the Federal Reserve Bank of San Francisco, a recession is defined as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.” All of those indicators are currently positive. A depression is defined as “a more severe version of a recession.” The Great Depression of the 1930s was a sustained period of economic stagnation, falling prices, and very high unemployment.

You don’t have to be a student of economics or follow economic indicators closely to understand that inflation and recession don’t usually coincide (except during the 1970s experience of “stagflation,” which is not happening at present). Most Americans can remember all the way back to May 2020, when the unemployment rate was 13.2 percent, more that triple what it is today. And today’s ubiquitous “Help Wanted” signs are not something you saw in 2020 — or, for that matter, in October 2009, when unemployment maxed out at 10 percent. You know, during the Great Recession.

It’s possible an awful lot of people think recession or depression just means economic trouble even if the problem at hand — inflation — is the opposite of, well, recession or depression. [Due to lousy economics reporting, and Americans’ general lack of economics knowledge.] Or maybe, as The Atlantic’s Annie Lowrey suggests, something more fundamental is going on:

The economy is booming and people feel terrible. This strange situation is born of strong partisanship, complicated economic factors, changes in voter ideology, and the broader state of the world …

The gap between Democrats’ and Republicans’ consumer expectations rose from roughly 20 to 25 points during George W. Bush’s and Barack Obama’s presidencies to more than 50 points during the Donald Trump and Joe Biden years.

But it’s not just Republicans feeling bad about the economy, Lowrey notes:

The chaotic withdrawal from Afghanistan, the Delta and Omicron coronavirus waves, the sputtering of the Democrats’ election-reform and social-infrastructure bills, and, perhaps most of all, the false assurance that inflation would be “temporary” — all of those factors led Democrats and moderates to turn on Biden. “There’s no way for Biden, and Democrats generally, to offer a counternarrative that’s going to be as attractive as the bad news,” [Vanderbilt University political scientist John] Sides told me. “It’s been very hard for Democrats to feel optimistic.”

Americans may soon get a refresher course on what a real recession feels like if the Federal Reserve Board chooses to jack up interest rates to fight inflation, which is likely to slow down economic growth and boost unemployment. Maybe the Fed will get it just right and the economy will cool down without stalling out, or maybe the worst will happen and a deep recession will arrive.

[If] there was ever a time when Uncle Joe need[s] to project a calm and steady hand on the tiller, it’s now, whether it’s in dealing with the pandemic, a suddenly very dangerous world, or an economy that feels bad even in the ways it should feel good.