Total nonfarm payroll employment increased by 256,000 in December, and the unemployment rate changed little at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment trended up in health care, government, and social assistance. Retail trade added jobs in December, following a job loss in November.
It was a tremendous employment report. Then why did stock and bond values tank on Friday? December’s unemployment report was certainly good for workers. Employment is maxed out, with employers unable to hire new workers other than replacements for those retiring or changing jobs. The Labor Department’s JOLTS report showed that employers reported 8.1 million open job positions in December.
The strong employment report has reignited fears that the Fed will halt their rates reductions because of inflation fears. Almost everyone is currently predicting strong fourth quarter economic growth and continued full employment that has prevailed since January 2022.
The inflation ‘culprit’ (f you want to call it that) is strong government spending for all the construction and climate change projects being funded from the various Bidenomics’ bills.
In fact, it is Bidonomics, the $5 trillion plus investments in the US economy over this decade, that is keeping Americans fully employed. And it is boosting employee wages, as well, which is why inflation is proving so difficult to tame.
We are joined in the age-old battle of workers vs. owners, employees vs. employers, over how to divide our national wealth. Wall Street investors want lower inflation because it doesn’t dilute their wealth, while workers want full employment because it increases their wages.
So who is really complaining about our fully employed economy? Elon Musk, the world’s wealthiest Oligarch, for one. It is those that don’t like any inflation because it dilutes the value of their assets. Therefore the so-called efficiency experts led by Elon Musk want to shrink government spending without admitting it is the only thing keeping Americans fully employed.
Renown economist Mohamed El-Erian recently stated on CNBC’s After the Bell that the U.S. economy’s spectacular growth is the only thing keeping the world’s economies afloat, so why should we worry too much about higher inflation at this stage?
Well, it is triggering consumer worries about rising prices and has provided the propaganda tools that re-elected the party of oligarchs wanting to slash government programs that benefit wage earners most.
Expectations in the University of Michigan sentiment survey for inflation over the next year jumped to 3.3% in January from 2.8% in the prior month. It is the highest rate since May. Expectations for inflation over the next five years surged to 3.3% this month from 3% in December. That’s the highest since June 2008.
But consumers know how to adapt, especially with wages that are keeping ahead of inflation. They tend to look for more bargains when they see rising prices. So, shouldn’t our government main job be to keep workers fully employed and healthy rather than benefiting Elon Musk’s efficiency experts and Wall Street financiers?
Harlan Green © 2025
Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen
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