The Labor Department reported this morning that U.S. employment in July rose by 943,000, with a big drop in the unemployment rate to 5.4%. And promptly and compellingly, from every well-publicized side arose the cry that the time has come for the Federal Reserve to begin “tapering” its quantitative easing program of securities purchases from the banks, bring inflation under control with higher interest rates, etc. In Congress, Sen. Joe Manchin of West Virginia called on the Fed to reconsider its monetary policy completely, given that, as he sees it, there has been a “full recovery” from the pandemic collapse and inflation is rising.
While these nearly 1 million new jobs were parading by, however, one might notice that they were entirely an artifact of “seasonal adjustments.” The unadjusted figures gathered in the Department’s Establishment Survey actually showed total non-farm employment dropping by 133,000, roughly what usually happens from June to July over the last decade (summer jobs for teens are a thing of the past). Looking closer, we see that total employment remains a full 6.5 million below its peak in November 2019; goods-producing employment is still 650,000 less than its recent peak, which was in August 2019. We also see that the American labor force has shrunk by 2.1 million participants in two years, and the employment/population rate has dropped by a full 2.4% in those two years. Not surprisingly, if we turn our gaze to the back of the parade, we see that the number of Americans out of the U.S. labor force has risen sharply by 4.37 million since July 2019.
There has been a rapid and severe atrophy of the labor force, impoverishment of key parts of it, and a collapse in productive employment, constituting an economic emergency for the nation. So rather than demanding the Fed do another monetary trick, demand the Congress nationalize the Fed, replace its management, re-charter it as a national bank for infrastructure and manufacturing, and as Lyndon LaRouche insisted, “make sure you call it Hamiltonian.”
