Economist Peter Schiff Criticizes June Job Gains 92% Non-Productive

Economist Peter Schiff has sharply criticized the latest U.S. Bureau of Labor Statistics (BLS) report, which indicated that 147,000 jobs were created in June. Schiff contends that 92% of these jobs were in sectors he deems non-productive, such as government, health, or social services. He argues that these jobs do not contribute to narrowing the country’s trade deficit but instead lead to more government debt and higher inflation.

Schiff's remarks came shortly after the BLS released its Employment Situation Summary for June. According to the summary, nonfarm payroll employment increased by 147,000, surpassing economists’ forecasts of around 110,000 new jobs. The unemployment rate dipped to 4.1% in June from 4.2% in May, indicating a resilient labor market that continues to add jobs, albeit with a focus on specific sectors and signs of slowing wage growth.

Despite the positive indicators, Schiff insists that the data depicts a weak labor market. He pointed out that almost half of the June jobs created were non-productive government jobs and that the official unemployment rate of 4.1% is misleading. Before 1994, the BLS used a broader definition of unemployment, more akin to today’s 7.7% U-6 rate, which Schiff believes better reflects reality.

Schiff's dismissal of the job gains has sparked a debate among economists and analysts. Many users questioned Schiff's tendency to dismiss positive economic achievements, arguing that blaming certain jobs for inflation or trade deficits flips the logic. One user, identified as Erick, contended that the decline in manufacturing was not caused by hiring teachers but by years of offshoring, automation, and lack of reinvestment. Erick emphasized the importance of robust infrastructure and a strong education system, asserting that these jobs are demand stabilizers rather than trade leeches.

Initial reactions to the labor data have been largely positive, with some economists highlighting a stronger-than-expected labor market. However, concerns have been raised about the notable increase in the long-term unemployed, which stood at 1.6 million, up 190,000. This increase suggests that while the headline unemployment rate fell, there are underlying issues in the labor market that need to be addressed.

Schiff's perspective is rooted in his belief that the U.S. economy faces significant structural issues that are not addressed by short-term job gains. He advocates for policies that promote domestic manufacturing and reduce reliance on imports, arguing that these measures would lead to more sustainable economic growth. The differing views on the labor market's health highlight the complexity of economic analysis, underscoring the importance of considering multiple factors when assessing the overall health of the economy.