Imagine a year's worth of stock market gains built on economic and employment data that was fake from the start. The government's constant downward revisions of this data, culminating in the 800,000 job cuts last week, expose the true nature of our fake economy, which benefits those connected to the government to the detriment of everyone else. No plan by the Federal Reserve, including interest rate cuts, will solve the permanent stagflation facing the American people.
Every economic indicator has become a laughing stock: jobs, GDP reports, inflation, manufacturing, retail sales, etc. Governments initially release mediocre to positive data, briefly boosting the stock market. But these numbers are always revised downward or negatively in the following months. Even before last week's shocking release, U.S. employment numbers had already been revised downward by 750,000 compared to initial reports since February.
As a result of government spending, core inflation has remained above 3% for 39 consecutive months, while household and credit card debt have hit record highs.
The data for 15 of the past 16 months has coincidentally been revised downward. We all knew that the published employment statistics did not reflect reality. In fact, 59% of American adults In the midst of a recessionThen came the shocking announcement from the Bureau of Labor Statistics, which finally admitted that the 818,000 new jobs it reported never actually existed, the biggest revision since 2009.
Since July 2023, only 1.4 million jobs have been created, while the working-age population has increased by 1.64 million, indicating a shrinking market relative to the population. Most of these new jobs have been part-time, government or government-related, and mainly filled by foreigners.
In last week's report, the only sectors revised upwards were government employment and health care, which are essentially managed or controlled by the government, while manufacturing was revised downwards by 115,000 jobs, back to June 2022 levels. This is surprising given that the government has pumped trillions of dollars into the sector through the infrastructure bill, the Green New Deal and record government spending.
Consider all of the inflationary spending the government has saddled consumers with through these bills, plus the additional $7 trillion in COVID-19 related spending and monetary easing. What have we gotten out of that inflation? Only $6.6 trillion in GDP growth since Q4 2020, when GDP recovered to pre-COVID levels. At the same time, $12 trillion in new debt has been incurred since COVID. In other words, all of that GDP growth came from government spending, but we only got 55 cents of every dollar. What we are left with is a net negative job market and an unsustainable record high cost of living.
This new employment data: Philadelphia Fed Report27% of non-manufacturing businesses surveyed experienced a decline in full-time employment, the highest rate since COVID-19. Meanwhile, the ISM Manufacturing PMI index has contracted in 20 of the past 21 months, the longest streak in more than 25 years. Retail spending, boosted by government intervention, has finally hit a wall. June Numbers was revised significantly downwards.
As a result of all this government spending, core inflation has exceeded 3% for 39 consecutive months, household debt and credit card debt have reached record highs, currently standing at $17.8 trillion and $1.14 trillion, respectively. Credit card debt has increased by 50% since Biden took office, and Americans have spent $2.1 trillion of their excess savings to maintain a standard of living created by government waste, shady political bribery and venture socialism. As a result, credit card interest rates have reached a record high of 22.76%.
What is this misery and poverty of humanity for? To inflate a stock market that is essentially made up of the “Magnificent Seven” companies so they can donate to left-wing causes. Today, Amazon, Apple, Meta, Microsoft, Nvidia, Alphabet, and Tesla account for 54% of the total U.S. GDP and 34% of the market capitalization of the S&P 500. Other companies and household stock portfolios benefit from the success of these companies, but for all but the wealthiest Americans, those benefits are outweighed by the inflationary costs of basic living expenses that consume most of the income of the bottom 90% of earners.
Small businesses are struggling. The Russell 2000 Index is down 9% from its all-time high, even as the major indexes near their all-time highs. Small businesses are filing for Chapter 11 bankruptcy. 61% increase from last yearOverall bankruptcy filings are increasing at the fastest pace since the Great Recession.
The government's fuzzy calculations in economic data not only mask the recession and stagflation that much of the country is experiencing, but also artificially inflate special government interests. For example, Home Depot and Lowe's Sales have been negative for the past few quarters. U.S. Census Retail Sales Report It shows that home improvement sales are trending upward. It's hard to trust this data when the two biggest home improvement stores are reporting clearly recession-like sales.
The U.S. Census Bureau revised down its monthly retail sales report. 7 of the last 9 monthsThis has artificially distorted the stock market over the past year, creating an image of a healthier economy than what is actually happening on Main Street.
Similar distortions can be seen in inflation data. The CPI reports that food prices have increased by 22% since 2021, while the real world suggests that the increase is much higher. The CPI also shows that rents have increased by 24% since 2020, while Zillow's rent index suggests the increase is closer to 34%. Even more shocking, the CPI report claims that the price of health insurance has fallen by 30% over the past two years. In reality, both private and public health insurance has fallen by 20%. Enterprise Health insurance plans Increased every year It's the highest number ever recorded.
The revision of 818,000 job gains is simply a public admission of what we already knew from most other government economic reports: think of these as the economic equivalent of “safe and effective.”
