Today the Labor Department (BLS) released the December 2021 Jobs Report.  After I read it and some commentaries on the numbers, I thought it beneficial to step back and look at 2021 as a whole and where we are, as far as employment, starting 2022.  The gist of the December report is the addition of 199,000 Jobs for the month, versus the 422,000 Wall Street expected.  The unemployment rate inched down to 3.9%, below the expected 4.1% and getting close to the February 2020 record of 3.5%.  Step back and look at today’s snapshot of the economy and compare its progress over the last year and the last two years, and you may be surprised how far we have come since February 2020 before the Big Shutdown. 

For the year, 2021 produced an average 537,000 jobs per month for a total of 6.4 million jobs added.  Great, except we lost a net of 9.2 million jobs in 2020, leaving us 2.8 million jobs shy of the February 2020 peak.  Interestingly, the change in the size of the work force, as implied by February 2020 and December 2021 data is down 1.4 million workers.  In sum, from February 2020 through December 2021 our total workforce shrank by 1.4 million workers, the unemployment rate went down 4.4% from 8.31% to 3.9%, or 6.3 million workers in December 2021.  Compare that to the available jobs averaging over 10.0 million for six months running, and it seems that we have reached full employment.  If workers want to work and cannot find a job, there is some compromise they’re not willing to make for the work.  Their choice, their rights. 

So what?  If we’re at full employment, and the Congress is still pushing a ~ $1.9 trillion ’stimulus’ package, after dumping over $7 trillion over the last 21 or so months and all of this is borrowed money!  Our total debt as a nation is around $29 trillion already!  So where in the Sam Hill is all this money going to go?   

Congress spends more than the economy has a capacity to absorb.  When you’re pushing resources to the limit, that demand does nothing for the supply of capacity, so the money in the economy just competes for a fixed set of resources, just like an auction.  And that is inflation.