With the US economy having only created 20,000 new jobs in February, compared to the expected 180,000 jobs, US and global economic growth are continuing to slow down due to tensions in international trade between major economies, financial policy analyst Daniel Sankey told Sputnik Tuesday.
“How we calculate and quantify jobs is kind of crazy in our society. Though I will say that the fact that it was only 20,000 versus 180,000 is crazy. That matters, even if we were calculating the numbers in kind of skewed ways for political ways, which we are, we can’t fake a decrease like that, really, and not have downstream effects,” Sankey told hosts John Kiriakou and Brian Becker on Sputnik’s Loud & Clear.
According to a Friday report by the US Labor Department, the US economy added 20,000 jobs in February. In addition, the unemployment rate decreased 0.2 percentage points to 3.8 percent, and hourly earning increased 3.4 percent in the past 12 months.
US officials said harsh weather conditions, with freezing winter temperatures and storms in parts of the country, contributed to slower business activity in February. Additionally, the after-effects of the federal government shutdown affected jobs in the services sector, adding to the overall weaker picture, Sputnik previously reported.
“One of the economists who was writing up an article about this in the Wall Street Journal was talking about [how] one of the reasons why things looked better in January than in February is that a lot of federal employees, due to the shutdown, had to get a part time job to make ends meet, and so they might have gotten counted twice in January, once for the part time and once for the regular job,” Sankey told Sputnik.
“And in February, they would have had only one job. If you look at the scenario that he described, that’s not economic growth; that’s not prosperity; that’s having to take another job because you got laid off. That sign should be an indication of economic problems. So what we’ve seen is a steady increase in employment for quite some time, and this is sharp adjustment. You need about 200,000 jobs or so to kind of break even, to have a steady, flat state, and now we’re way below that.”
“What’s also significant is that in spite of the fact that our unemployment numbers are exceptionally low, working people are still facing tremendous challenges and shortfalls in their budget. Recently we talked about how 7 million Americans are three months or more behind on their auto payments. So, this is not a good sign for working people. This shows that there hasn’t been as many jobs added, and it really pushes further the narrative that we’ll experience some kind of recession or global slowdown in 2019,” Sankey added.
February’s job gains are the lowest since September 2017, even though the US economy added 311,000 jobs in January, which is much more than the 165,000 that researchers had initially predicted, according to reports.
“The unemployment rate, the one that we display, is one of several suggested unemployment rates that are based on different calculations reported by the US Bureau of Labor Statistics. I think there are four different numbers, and the one that is almost always used is the one that we see, the lowest,” Sankey told Sputnik.
“The administration in office has the right to choose the one they want to use, so they’re going to use the one that makes them look the best, of course. But there are other ways of calculating employment that are different and in some ways more accurate and show kind of a bigger picture of data.”
“The Trump administration wants to see things going very well. The US Bureau of Labor Statistics is a federal agency and part of his [Trump’s] government, and a lot of these economists that are talking have a vested interest in seeing the Trump administration policies continue. The process is not hard science; it is largely political, and there is tremendous influence in making those numbers appear as they are,” Sankey added.
When asked about the latest labor statistics, US President Donald Trump diverted attention to wage growth.
“Wages are going up, first time for many years,” Trump told reporters on Friday.
White House economic adviser Larry Kudlow also referred to the low job growth number as an oddity, pointing fingers at the government shutdown and “winter, seasonal issues,” according to multiple reports.
China is facing a slowdown in inflation, and as a ‘no-deal’ Brexit looms, the UK’s economy is also bracing for change.
“There are a number of political factors that are contributing to the global slowdown,” Sankey said.
“The first one is instability with China. That’s huge. Newspapers are hinting that it [the trade war between the US and China] might be close to a resolution,” Sankey noted.
“We’re coming up on Brexit, and it looks [like] there’s going to be a hard Brexit. It’s certainly a possibility. There is no real, good contingency plan. That’s going to affect things in Europe, which has a downstream effect in the US. So, already we have these massive economies — those two are going to be huge factors. I don’t really see a scenario where they play themselves out in a simple way. Finally, is the fact that we are really seeing a disconnect between jobs, job creation and general prosperity,” Sankey added.