Sen. Mike Rounds (R-SD) said that while the July jobs report showed strong job growth, those numbers could be a “precursor” to “serious economic issues coming very shortly.”
Appearing on ABC’s “This Week with George Stephanopoulos” on Sunday, Rounds said that while the job figures were high, they masked the fact that soaring inflation meant payrolls are declining in value, so companies are still hiring.
“You talked about the possibility of a recession, we just saw that jobs report on Friday, 528,000 new jobs in July, 3.5% unemployment, that’s 50-year low,” host Stephanopoulos began.
“There are two parts that we want to remember,” Rounds responded. “First of all, we know that our GDP has gone down the last two quarters, so let’s all recognize that’s accepted by everybody, that is down.”
“The second part is that, while we’re very happy to see the job growth, positive thing, remember that back in the 1970s, and moving into the 1980s, we actually saw job growth, because unless your wages are keeping up with inflation, payrolls actually go down in value. And so what you’re actually seeing, we believe, might be a precursor of what’s to come.”
“You’re gonna find out larger companies such as Walmart are starting to talk about to reduce the number of people they’re gonna be employing,” Rounds continued. “But in the meantime, if your wages– if you can save on wages because, as inflation goes up, the value of wages is not as great as it was, unless it’s also going up at the same or greater rate– well then, you can afford to have people stay on the payroll, and your payroll actually goes down compared to the products you’re producing or that you’re buying and moving through the market.”
“So while this is good and we want to see job growth, I don’t think we can necessarily say that this is not a precursor yet to probably some more serious economic issues coming very shortly,” he added. “We hope we’re building our way out of a recession but you don’t do that by raising taxes. You do it by promoting and expanding businesses, getting the economy rolling again.”
The economy added 528,000 jobs in July, as The Daily Wire reported Friday, pushing the unemployment rate down to 3.5%. But that number may not be an accurate measure of the strength of the economy, experts noted. “The gain of 528K #jobs in July as the labor force participation rate fell to 62.1, means that most of the new jobs went to people who already had jobs,” economist Peter Schiff tweeted.
“Collapsing real wages force many workers to moonlight to pay the bills. If the labor market were strong one job would be enough,” he added.