Recovery continues but for how long?

The recent unemployment tells two stories. The first is that unemployment went down to 4.8% and the second, actual job creation was less than 200,000 and below expectations.  The recovery that began in May of 2020 when Trump was President, continues but inflation is now turning into stagflation and the Biden’s economic plan is threatening the recovery.

This recovery and drop in unemployment is Republican driven as Republican states have 30% less unemployment than Democratic states as Democratic states average 17% over the national average and the bottom ten in unemployment are all run by Democratic governors.  Without Republican governors, our unemployment would be even higher since many of these governors open their economy sooner in the face of the pandemic. 

Regardless how you defined a Republican and Democratic States, Republican states out performed Democratic states when it comes to job creation.   

Since May 2020,  the economy has produced an average of 1,200,000 jobs per year with 1.5 million jobs created average from May 2020 to December 2020 as the economy saw unemployment dropped from 14.4 to 6.7, lower than originally predicted.  The economy now has dropped to 4.8 as we have seen an average of 500,000 jobs created. 

The one black cloud over the horizon is stagflation and the Biden economic plan concentrate more on dividing more evenly a stagnant pie as opposed to growing that pie to allow those at the bottom to move up the economic ladder. 

Biden inherited a growing economy and simply allowing the economy to heal while learning to live with the virus, Biden would be farther ahead but alas, he decided to allow the left to take over the agenda, putting the recovery at risk.

Dominic Pino writing in National Review observed, “The Fed’s dual mandate is to maintain low unemployment and low, stable inflation. In the long run, those are both good things for the country, and they are both possible to achieve. In the short run, however, there is a tradeoff between inflation and unemployment… The Fed’s dual mandate is to maintain low unemployment and low, stable inflation. In the long run, those are both good things for the country, and they are both possible to achieve. In the short run, however, there is a tradeoff between inflation and unemployment… But if inflation is not transitory, and unemployment keeps declining, the Fed may wind up in a really tricky situation: It may be forced to contract the money supply and reverse good unemployment numbers in the short run to get inflation back in line.”

The Feds may be facing that choice where inflation needs to be dealt with and this will bring a recession in an economy facing trillions of dollars of debt and deficit.  As it stands now, many families are losing income through inflation.  In a recent analysis, we found that families in Georgia, New Hampshire, and Nevada saw their income decline by 1100 to 1500 dollars due to the rise of inflation.

The recovery is still going on but the recovery is stagnating and stagflation is now in play. 

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