Self inflicted damage by the Democrats who continue to push for unemployment benefits rather than re-opening has lead to another dismal unemployment report.
Consensus estimates were near 1 million jobs, but came in at a paltry 266,000. Make no mistake, this was purely a result of “Pay to Stay” politics stemming from the 2020 election. This version of UBI-light has been high on the list of Democrats hoping to transform its electorate into a paternal dependent base happy to get minimal money to stay home rather than work. Small businesses are screaming from the rooftops that hiring has been exponentially difficult and wage inflation is inadvertently created which in turn spurs on inflation across the board.
Furthermore, the Fed’s continuous printing of money has compounded the inflation problem as 23% of the dollars ever created, have occurred over the past 12 months. And people wonder why inflation has been parabolic in multiple commodities and sectors that usually have no correlation. Yellen and Biden’s weekly declarations of “full employment” went from end of this year, to end of next year. The reality is that with unemployment benefits aplenty, unemployment at 15%+ will be around for years, making it key election issue going forward.
Senators and governors in swing states will be pressured before midterms to deal with small businesses and agriculture related problems. This will cause significant headaches for Biden and progressive Democrats from passing any taxation, infrastructure and climate policies. The Sinema-Manchin wall remains intact for the time being until at least 2023 if the Democrats are to hold the Senate majority which looks increasingly unlikely.