Peter Schiff warns US job numbers are up only because Americans are ‘forced to take 2 or 3 jobs’ — rubbishes Biden economic wins as ‘lipstick on a pig’ and claims Fed has lost inflation fight
The U.S. economy added 353,000 jobs in January 2024, significantly outperforming economists’ expectations. But according to Peter Schiff, CEO and chief global strategist at Euro Pacific Capital, the situation might not be as positive as the headline figures suggest.
“The only reason that jobs are going up is because people are forced to take two or three jobs, because prices keep going up, and their paychecks are not,” said the economist and financial commentator during a recent appearance on OAN Network’s “Real America.”
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According to the Labor Department’s latest jobs report, 8.1 million people held multiple jobs in January 2024, up from 7.8 million a year ago. Notably, 416,000 people were working two full-time jobs simultaneously, an increase from 343,000 in January 2023.
The report also indicated that the unemployment rate held at 3.7%, close to a multi-decade low.
Schiff added, “We’ve been replacing full-time jobs with part-time jobs. So the numbers would favor extra jobs.”
The number of Americans who worked part-time but would have preferred to work full-time in January was 4.4 million, up from 4 million a year ago and 3.7 million two years ago.
Rising involuntary part-time employment has been called a leading indicator of a slowing economy by economists speaking with The Washington Post and “Marketplace”.
‘Figures lie and liars figure’
Schiff’s perspective on the labor market starkly contrasts with that of the White House.
President Joe Biden recently highlighted the jobs report as proof that “America’s economy is the strongest in the world.”
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Biden also celebrated other achievements of his administration, saying, “Our economy has created 14.8 million jobs since I took office, unemployment has been under 4% for two full years now, and inflation has been at the pre-pandemic level of 2% over the last half year.”
Despite these accomplishments, Schiff remains critical.
“Figures lie and liars figure,” he said, paraphrasing a famous quote often attributed to Mark Twain. “… and they’re always going to try to spin these numbers and try to, you know, put lipstick on a pig. But if you look at Biden’s popularity, which is the lowest of any president in history, and you look at why he’s so unpopular — it’s the economy.”
To be sure, the U.S. economy continues to demonstrate growth. In Q4 of 2023, real GDP in the U.S. grew at an annual rate of 3.3% according to the Commerce Department’s advance estimate. This growth significantly exceeded economists’ expectations of a 2% increase.
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Permanent inflation?
Schiff is particularly concerned about America’s inflation challenge.
The consumer price index increased by 3.1% in January 2024 from a year ago, according to the Bureau of Labor Statistics. This was higher than expected, but is a notable improvement from the 9.1% annual increase recorded in June 2022, which was the highest since 1981.
Nonetheless, Schiff is unimpressed, labeling the latest CPI report “a disaster.”
“It really confirms what I’ve been warning for months now that inflation is bottoming, that we’re not at the peak, but we’re at the trough and we never got to 2%,” he said.
“The inflation problem is far from solved. In fact, it’s here permanently, and it’s going to get a lot worse as the months go by.”
High interest rates are often viewed as a remedy for inflation, and the U.S. Federal Reserve has indeed implemented significant interest rate hikes. The effective federal funds rate has increased from 0.08% in February 2022 to 5.33% today.
Despite the decline in the headline inflation rate, Schiff believes this is not a sign of victory for the U.S. central bank. He said that the latest CPI report shows “the Fed has already lost the inflation fight,” because it cannot further raise rates, which, according to him, “is what it needs to do.”
Still, other experts believe that inflation is no longer a concern in America.
In October 2023, Nobel laureate Paul Krugman declared victory over inflation in a post on X, formerly known as Twitter.
“The war on inflation is over. We won, at very little cost,” Krugman wrote. He recently wrote an op-ed for The New York Times in which he called January’s disappointing inflation numbers “a statistical blip.”
Jeremy Siegel, professor of finance at the Wharton School of Business, had a similar view.
“We are not going to have any more inflation,” Siegel said in a November interview with CNBC.
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