But unemployment rate ticks up to 5.9 percent in June
The U.S. Bureau of Labor Statistics’ monthly jobs report is actually two distinct surveys — one of employers (the establishment survey) and one of people (the household survey). It is not uncommon for these two surveys to significantly diverge in their findings.
In June, the establishment survey found that payroll employment rose by 850,000 in June, a huge number normally, but not surprising as many large states effectively reopened their economies much more fully last month. This increase reflects that belated decision.
The household survey, however, tells the story of what people are doing, with 18,000 fewer Americans saying they have jobs. The unemployment rate did not go down as one would have anticipated — instead, increasing to 5.9 percent. The percentage of people in the workforce actively employed or looking for a job remains disappointing. And while some try to explain this away due to the aging of America’s workforce, that factor can only explain a portion of the people who have not returned to the workforce post-COVID.
The phenomenon of people voluntarily leaving their previous job to begin looking for new employment accelerated by about 17 percent to 942,000 in June with the number of people on temporary layoff ‘essentially unchanged’ at 1.8 million since May.
What does all this mean?
First, the economic crisis from state and federal-government reactions to the effects of the [coronavirus] has been over for about six months, and it is time to end all the special programs designed to provide special assistance. We know this because almost 1 million people who voluntarily left their employment to find better jobs tells us that a significant number of people are risking their livelihoods with the expectation that their next opportunity is right around the corner. This practical optimism is the natural outgrowth of the positive policies implemented by Donald Trump [in 2020], which saved many small businesses, successfully created the environment for the vaccines to be brought to market months — if not years — earlier than what would be normally expected, and discarded job-killing regulations to encourage recovery.
However, the massive spending that was put in place to negate the economically disastrous impacts of the virus in 2020, now threaten the recovery through creating a vicious wage/price inflationary cycle. It is time for the federal government to declare victory and end the war on fiscal sanity now by allowing the labor markets to naturally finish the job of returning to the 2019 Trump economy, the greatest in our nation’s history, by simply getting out of the way.
Rick Manning is president of Americans for Limited Government (ALG). The organization says it is a “non-partisan, nationwide network committed to advancing free-market reforms, private property rights, and core American liberties.” This op-ed is drawn from a news release the ALG issued on July 2.