Part of the difficulty in reading economic statistics to discern where we are in the cycle is the huge crater of 2020. A full shutdown like this had never happened before. All data just went nuts, seesawing one way down and then the other way up. Everyone is looking at this and trying to understand the implications.
Whatever you want to say about business cycles in the past, they followed patterns that could be traced. Theories could be mapped to explain them and policies constructed to avoid them. But it becomes a very different matter when you have suddenly imposed a global forced crash of nearly everything. We can only watch with amazement.
We have to add to this what seems to be a new problem, which is the outright gaming of the data for political reasons. We see it in all the big releases, from GDP to jobs to inflation. The spin in the press release has often contradicted the underlying data. Wall Street only follows the spin, and it is left just to a handful of people who care to unpack precisely what is going on.
The jobs data has all these problems. Each month, we hear about glorious job creation, only to find out later that they are mostly part-time jobs, mostly held by non-natives, while full-time jobs keep shrinking as real income continues to fall, now three years in a row. Parsing all of this and comparing it with the pre-2020 world becomes nearly impossible.
The latest jobs report underscores the point. The headline number seems amazing until you drill down into the jobs themselves. Looking at the more accurate household survey, instead of the establishment survey, we find a huge loss of 625,000 full-time jobs, and those are mitigated by an increase of part-time workers of 286,000. This is not a strong and vibrant market by any stretch. The press releases are pitching job losses as job gains.
