The Biden administration’s latest jobs report paints a rosy picture, but economic experts are raising red flags about the true state of the U.S. labor market.
At first glance, the June report’s 206,000 new jobs seem impressive.
However, Bob Nardelli, former Home Depot CEO and Chrysler Chairman, calls this figure “deceptively correct.”
Speaking on “Maria Bartiromo’s Wall Street,” Nardelli pointed out a crucial detail: “The second-largest employer last year was the government. And they’re back on the same track again this year.”
This government-led job growth is concerning for two reasons.
First, as Nardelli notes, government jobs don’t generate GDP.
Second, this hiring spree is happening despite a massive $2 trillion federal deficit.
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Steve Moore, senior economist at FreedomWorks, shares these concerns. “I think we’ve definitely shifted into a lower gear,” Moore said, suggesting the economy is slowing down more than the administration admits.
He highlighted a troubling trend: over the past 14-15 months, most new jobs have come from government and healthcare sectors, not from industries that produce goods.
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"I call that number, deceptively correct. …" The largest employer last year was the government. "There is no GDP generated by government jobs, former Home Depot CEO and former Chrysler Chairman Bob Nardelli said Friday, setting the record straight…— Desi Mac (@desimac13) July 8, 2024
Inflation remains a major issue, with Nardelli comparing it to carbon monoxide – a silent but deadly force eroding job quality and living standards.
This persistent inflation, coupled with what Nardelli calls “reckless spending,” is putting significant stress on the economy.
The White House’s recent move to extend overtime protections for certain salaried workers has also drawn criticism.
The policy aims to benefit about 1 million workers earning less than $43,888 annually, with plans to raise this threshold to $58,000 by January 1.
However, Nardelli argues this approach may create inequities between workers of different skill levels and isn’t the best way to improve living standards.
Looking ahead, both experts warn of tough times for whoever wins the next presidential election.
As Nardelli put it, the next occupant of the White House will be “hit with a wrecking ball” when trying to address these deep-seated economic issues.
For investors and job seekers alike, the message is clear: don’t be fooled by headline numbers.
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