June 7, 2024 7:21pm EDT
LARRY KUDLOW: 'Look under the hood' of Biden's May jobs report and you'll see the problem
Unemployment rate rose to 4%
By Larry Kudlow FOXBusiness
If you're going to buy a pre-owned, used car like so many people have to do nowadays, you can't just be impressed by a shiny new paint job.
Instead, you've got to look under the hood. You've got to check out the engine, the oil, battery, brake fluid and spark plugs.
Well, today's release of the May jobs report is much the same. The shiny, new paint job was a significant 272,000 increase. Although nearly half of that was government and government-related jobs, that's what the nonfarm payrolls showed. However, when you lift up the hood, what you see is an incredible 408,000 job loss from the household survey.
So what's the difference between the two? Well, the payroll establishment survey is mostly larger, established companies where the Bureau of Labor Statistics dials up the human resources department and gets a job headcount, but for the household survey, the BLS mainly calls families and individuals to ask if they are employed or not.
Traditionally, the household survey is more heavily weighted toward small businesses, and actually over the past year has produced only a tiny 31,000 increase in jobs. Now, additionally, under the hood, the civilian labor force shrunk by 250,000 and as a consequence, the unemployment rate notched up to 4%. And another key indicator of the labor force is the employment-to-population ratio, which fell slightly in May to 60.1%.
Now aside, the late, great labor economist Ed Lazear, former CEA chair, longtime professor at Stanford University, Ed Lazear always pointed to the employment-population ratio as the single best indicator of labor market strength or weakness. He was, by the way, a dear friend and mentor of mine.
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https://www.foxbusiness.com/media/larry-kudlow-look-under-hood-bidens-may-jobs-report-youll-see-problem
