Rising Unemployment Is Just The Excuse The Fed’s Been Waiting For

The Peter Schiff Show Podcast

Yesterday we got the first jobs report of the year and the way Wall Street and the media seem to be spinning it: "It was a good report!" It was good news because the headline number beat expectations: We created 227,000 jobs in January vs the 175,000 that had been expected Of course it was an improvement on the 157,000 jobs which was a disappointing report in December But once again, if you look beneath the headline number, you'll find that there are a lot more problems to this report than the media is reporting First of all, as always, the lion's share of these jobs are lower-paying service sector jobs They're in retail trade, leisure and hospitality So we're not creating the types of jobs that will Make America Great Again In fact, if you look at the higher paying jobs - manufacturing, mining logging These jobs are barely adding workers, if not losing workers But the bigger story here has to do with what's happening to labor force participation, wages and unemployment The official U3 Unemployment rate went up from 4.7% to 4.8% The more revealing U6 number, which I think paints a more accurate picture of the true state of the labor market That went up from 9.2% to 9.4% Even Donald Trump, when he was campaigning, said that that number was far more accurate than Obama's official numbers Why did the unemployment rate go up so much, considering that we had 227,00 jobs created? The reason was that we had over 700,000 workers re-enter the labor force This goes against the trend that has dominated the entirety of the Obama administration Where we saw a mass exodus of workers leaving the labor force In fact, the labor force participation rate went up in January from 62.7% to 62.9% First of all, why did so many Americans decide to re-enter the labor force in January? Maybe there are 2 possible explanations and maybe they're both accurate: One might have to do with all the optimism surrounding the Donald Trump Presidency Remember, Donald Trump campaigned that he was going to be the greatest jobs President And it's possible that a lot of people believe that this is going to happen So they are re-entering the labor force to land one of these great jobs that President Trump will be delivering You have to enter the labor force in order to apply for one of these jobs Another reason is that the people who have been "sitting out" of labor force participation Maybe circumstances are finally catching up with them, maybe they're running out of money Maybe the cost of living has risen to the point that they have to, by necessity, find a job