In typical Orwellian fashion, the Biden Administration and the corporate media have attempted to rewrite history and even the definitions of words in recent weeks by changing the standards of what constitutes a “Recession.” A recession is two consecutive negative GDP prints signaling an overall decline of a nation's economy. This IS what a recession is, and no president or puppet media economist is going to change that fact. The US is, by definition, in the middle of a recession.
At no point ever in the history of economics has a recession required an explosion in unemployment. This is not a factor that matters because unemployment is not a leading indicator, it is a lagging indicator. Job losses usually happen at the END of an economic breakdown, not at the beginning, because governments and corporations will do everything in their power to artificially prop up the jobs market and hide instability until the system becomes so broken that they can no longer pull the wool over the public's eyes.
Jobs and stock market tickers tell us nothing ahead of time.
If you really want to know where the economy is headed, you look at inflation vs. deflation, rising prices vs. stagnant wages, rising or falling interest rates, national and consumer debt levels, bankruptcy and small business health, supply chain stability, currency devaluation, bond market stability, and yes, even GDP. There are a hundred indicators a person could look at to gauge a financial downturn – Stocks and jobs are at the bottom of the list.
GDP is also questionable, but for different reasons. GDP numbers are essentially an inflated fantasy designed by governments to misrepresent economic health, and this is largely due to how they are calculated to include government spending. Governments produce no wealth and no value; they only create waste, and they have to steal wealth from the population to then waste that money elsewhere. That, or they print the money from thin air. But this is not wealth creation, it's wealth destruction.
A large part of US GDP includes vast sums of government spending that pumps up the numbers and makes our economy look healthier than it really is. In 2020, government expenditures rose to between 31%-44% of US GDP depending on which calculations you look at. Without this fake wealth creation our GDP would plunge exponentially.
We have to take this fact into account and realize that when our GDP actually does print negative (as it just did), the situation is far worse than many people are led to believe. That is to say, if GDP goes negative even while it's being artificially propped up by government spending, then economic activity is suffering a substantial decline.
By extension, GDP is also propped up by inflation in prices. The higher the prices on everything the more people have to spend, and thus the more retail sales appear to climb and the higher GDP prints. The government reports both Real GDP and Nominal GDP; Real GDP is supposed to account for inflation, but it is adjusted according to rigged inflation calculations. Official GDP is 9.2%, but REAL inflation calculated according to the same standards used in the 1970s and 1980s is closer to 17%. After the stagflationary crisis of the 70s and 80s the government simply shifted how the numbers are collated rather than learning from the overall disaster.
But what does this have to do with jobs numbers?
The White House and a host of dishonest mainstream economists have sought to dismiss the recession by calling GDP numbers “irrelevant.” They claim the old standards don't matter because job numbers are so high in the US. But this is a form of fraud and misdirection, as well.
In 2020, GDP took a nose dive due to half the country shutting down in the name of “flattening the curve.” Then, it skyrocketed in late 2020 and remained stable into 2021. How? Because the Federal Reserve and the government instituted a $6 trillion+ stimulus package that dumped fiat dollars directly into the system. That's $6 trillion of money creation in less than a year, and Biden has been trying to keep the money train going with his "Build Back Better" schemes.
Where did that money go? It caused a tidal wave of retail spending and business spending. And, with the government offering covid checks, PPP loans, a federal rent moratorium and other benefits on top of normal unemployment benefits, the jobs market shot to the moon while most companies found it impossible to meet worker quotas. The government and the Fed conjured up perhaps the largest employment bubble in history, and it's about to burst.
How much time does $6 trillion of Fed fiat combined with welfare, unemployment benefits and not paying rent buy the country in terms of the US jobs market? Not very long, apparently.
Massive inflation has ensued ever since, causing prices to double on most retail goods, food, gasoline, etc. In the meantime, Biden brags about “the greatest economy ever” while the majority of Americans say they are more worried about the economy than any other issue in circulation today. The public doesn't care about covid anymore, they care about price inflation and recession. We have entered a classic stagflationary scenario; all that's left is for job losses to catch up, and they will in the near term.
And what about that incredible jobs print from the Bureau of Labor Statistics this past month? Isn't that a signal that the economy is still in great shape? Not really. Think about it this way – Millions upon millions of Americans were happy to sit at home and do nothing for almost two years while collecting government payouts and living rent free. Some have even tried to start an anti-work movement, demanding even more money and more respect for no-skill labor.
We had a labor shortage from 2020 onward, but now, suddenly, 528,000 people are jumping into the jobs market again? Is this a sign of a healthy economy? Or, is this a sign that the covid money finally ran out, the public is broke and people are being forced to get jobs once again? Everyone has to eat, after all, and you can you can only be an activist so long as your belly is full.
GDP numbers are telling us what is about to happen. Spending is in steep decline. Economic activity propped up by government projects is still falling, and the effect of trillions in covid stimulus is fading. As spending drops the need for workers will reverse course. All those jobs that were magically fabricated because of the covid stimulus buying spree in 2020 will now magically disappear as the money dries up. It is only a matter of time; mass job losses will most likely be triggered by early 2023. The Biden Admin, the Fed and some media economists know this event is coming, but they are pretending as if all is well.