Originally published at Pelican Institute. 

Originally published at Kansas Policy Institute.

​Like many states, Kansas has a complex economic situation in 2024. The latest Bureau of Labor Statistics (BLS) data provide a blurry picture of the state’s employment situation. While nonfarm employment numbers offer some signs of stability, a closer look at the household employment data reveals potential challenges that warrant careful attention.

Understanding Nonfarm and Household Employment Data

To fully grasp Kansas’s employment trends, it’s essential to differentiate between nonfarm and household employment data. 

Nonfarm employment, reported through the Current Employment Statistics (CES) program called the establishment report, tracks payroll jobs in nonfarm establishments, excluding agricultural workers, the self-employed, and private household employees. This measure is a key indicator of jobs in major industries. This BLS survey excludes agriculture and farm jobs because they are difficult to measure due to high volatility and lack of reporting. 

On the other hand, household employment data collected via the Current Population Survey (CPS), called the household survey, includes jobs for the self-employed and those in private households but not separated by industry. This latter data set captures shifts in labor force participation and underemployment, often offering a more comprehensive view of economic health.

Historical Employment Trends in Kansas

Kansas’s employment trends provide insights into the state’s economic trajectory. Since the 1990s, Kansas has experienced periods of moderate job growth punctuated by significant downturns, such as the early 2000s recession and the Great Recession of 2007-2009. 

For example, nonfarm employment grew from 1.08 million in 1990 to 1.12 million by the mid-1990s, reflecting the state’s overall economic growth. However, the early 2000s saw a dip in employment due to the dot-com bubble burst, with a more substantial decline during the Great Recession. Post-recession recovery was slow but steady, with household and nonfarm employment regaining much of their lost ground by 2015. 

By 2019, Kansas had reached new employment highs. However, the COVID-19 pandemic disrupted these gains, causing sharp declines in employment across the state. Although there has been a recovery since then, the 2024 employment trends show a divergence that mirrors broader national patterns.

Nonfarm vs. Household Employment: A Comparative Analysis

Since the COVID-19 lockdowns, U.S. employment trends have shown a divergence between household and nonfarm jobs. Initially, household employment rebounded more swiftly as individuals turned to self-employment and gig work to navigate the economic uncertainty. However, nonfarm employment took longer to recover as traditional businesses faced prolonged disruptions and slow rehiring processes. Over the last year, household employment has slowed and remained flat, while nonfarm jobs increased by 2.5 million nationwide. 

These trends were similar in Kansas, where household employment bounced back faster than nonfarm jobs in the immediate aftermath of the lockdowns. Since July 2019, household employment has increased by 3,100 jobs, while nonfarm employment has increased by 40,800. Like the national trend, household employment has lost 13,146 jobs over the last year, while nonfarm jobs are up by 21,100. 

Household employment has declined in 12 of the last 14 months, with a decline of 14,475 jobs to the lowest level of 1.460 million since January 2022, but nonfarm employment has increased in 10 of those 14 months, increasing by 21,400 jobs to 1.462 million.

In July 2024, Kansas lost 1,700 nonfarm jobs, a slight decline of 0.1%. However, over the past year, the state added 21,100 nonfarm jobs, marking a 1.5% increase, primarily driven by gains in the leisure, hospitality, and professional services sectors. In contrast, household employment declined by 1,200 in July, raising concerns about broader economic well-being. 

At the national level, the U.S. added only 114,000 jobs in July 2024, far below expectations and reflective of a broader slowdown in the labor market. This weak performance suggests that Kansas’s challenges are part of a larger national trend.

Unemployment Rates: Kansas and Neighboring States

As of July 2024, Kansas’s unemployment rate is 3.2%, ranking 17th nationally, with the U.S. rate at 4.3%. The state’s unemployment rate reflects a relatively stable labor market, but the losses in household employment that go into the unemployment rate calculations highlight the need for Kansas to remain vigilant in its economic policies to ensure continued competitiveness. 

The differences in unemployment rates are notable when comparing Kansas to its neighboring states. For instance, Nebraska boasts one of the lowest unemployment rates in the country at 2.6%, ranking 5th nationally, while Missouri’s unemployment rate is slightly higher at 3.8%, ranking 30th. Iowa is in a better position than Kansas with an unemployment rate of 2.8%, ranking 8th. 

These comparisons emphasize that while Kansas performs reasonably well, there is room for improvement, particularly in creating a more dynamic and resilient labor market.

Improving Economic Vitality and Competitiveness

Kansas must prioritize economic freedom and fiscal discipline to enhance its economic competitiveness. Reducing government spending, revamping the tax system, and promoting regulatory reform are essential. By adopting strict spending limits tied to inflation and population growth, Kansas can create a more predictable fiscal environment and attract businesses. Streamlining regulations will encourage entrepreneurial activity and job creation, especially for small businesses and startups.

Kansas’s current economic challenges are not new. The state has faced long-term economic stagnation, with private sector job growth lagging behind national trends since the 1980s. 

Addressing these issues requires a concerted effort to reduce government spending and improve the business climate. Embracing reforms that promote economic freedom and pro-growth policies is crucial for ensuring long-term prosperity for all Kansans.

Originally published at KTRH News Houston.

​Rural towns and cities across the U.S. are still dealing with years-long workforce issues.

The younger labor force is more likely to seek work elsewhere in more urban or suburban places over areas with aging workers. There's been a noticeable hit to some blue-collar jobs that have made people consider where they live and work.

Dr. Vance Ginn, President of Ginn Economic Consulting, said a lot of rural communities have been trying to recollect themselves ever since the covid years.

"The number of workers who have decided to move to other places along with the higher cost of living has made it more difficult for people to live in a lot of these communities," said Ginn.

Because of that, people have been moving to places that are cheaper and still offer just as good quality of living. This has left rural areas stuck looking for workers to fill open positions.

"There's not as many workers available to fill the jobs that are needed," Ginn said. "What we're seeing is some pretty big hardship."

Ginn suggests in order to attract people back to their community or city or to get more people to move closer to them, these rural areas need to reevaluate what their property taxes and restrictions look like.

"That way the affordability crisis or how much they can afford to live in those communities will go down and that will help with a lot of the shortages that we're seeing in the workforce," Ginn added.

Texas seems to be doing better than some of the other larger populated states like New York and California who have higher taxes and more regulations. There have been a lot of people move to states like Florida and Tennessee too, states that don't have personal income tax.

​Did you know...

📈 Inflation remains high at 3.3% y/y, and the Fed's slow response is not helping. 

📊 The latest jobs report shows a shift to part-time work and declining labor force participation, with real wages declining.

🏡 The Texas GOP's priorities miss key issues like spending restraint and property tax elimination, which are crucial for economic growth.

Listen, like, share, and subscribe. Check out my newsletter for show notes and more at www.vanceginn.substack.com.

Originally published at Inside Sources. ​

The final jobs report for 2023 was recently reported. The headlines look good but don’t tell the full story. This has been a common theme with many economic indicators, from the labor market to economic output.

With this being an election year, politicians are trying to milk every apparent “win” or “loss” for voter approval. With all the noise, we need an honest assessment of the economic ups and downs to help guide voters in November.

First, the payroll survey shows that were 216,000 net non-farm jobs added in December, which historically is rather robust. However, that’s not even half the story.

To examine how many productive private-sector jobs were added in December, we need to make some corrections. This includes subtracting 52,000 unproductive government jobs added in December as they are a burden on private-sector workers. Also, we need to subtract the 71,000 jobs that were revised down for October and November.

Doing so leaves just 95,000 productive non-farm jobs added in December, which is historically weak.

Couple these findings with even weaker results from the household survey showing 683,000 fewer people were employed compared with November 2023, and this report is even weaker.

While the unemployment rate was unchanged from the previous report at 3.7 percent, the labor force dropped by nearly 700,000 last month, meaning fewer people had work or were looking for work. The labor force participation rate dropped to 62.5 percent, the lowest since February 2023.

Contributing factors to the declining labor force participation are myriad and complex, not always correlated to the economy. But they are typically connected with expanded roles of government and other factors.

For example, the Economic Policy Innovation Center recently released a report highlighting how millions of people have dropped out of the labor force. The author notes “if the employment-to-population ratio were the same today as it was before the COVID-19 pandemic in February 2020, 2.6 million more people would be employed today.”

The report finds that the largest share of people leaving have been retirees since the pandemic. The next largest group is 20 to 24 years old, who have been living off the handouts since the pandemic or with their parents.

Interestingly, even with skyrocketing daycare costs, those without kids are a large share of those leaving the workforce. This makes some sense as maybe they are young and don’t have kids and have other means to survive, but this also is a conundrum because they’re reducing their long-term earnings potential.

But with recent minimum wage hikes by 22 states that no doubt will displace many low-skilled workers and the rise in dependency on government safety nets over the last few years, there’s likely to be more people out of the labor force for longer.

Speaking of distortion, average weekly earnings have been improving, but after adjusting for inflation, they are up just 0.4 percent over the last year.

While it’s promising to see real wages go up after years when it wasn’t, workers would feel much more relief if inflation were further slowed. But mischief in Congress and the Federal Reserve keeps that from happening.

Inflation soared due to the federal government’s deficit spending, mostly monetized by the Federal Reserve. This created a situation of too much money chasing too few goods that resulted in persistent inflation. As purchasing power remains a problem for many Americans, workers become disenchanted with jobs, especially when the monetary benefit of government handouts exceeds wages.

Reducing government spending is imperative. Doing so will help the Fed tame inflation, reignite labor force participation, and spur job creation.

Celebrating wins is important, especially during the recovery after the Donald Trump lockdowns, but our leaders must not turn a blind eye to underlying problems. As we await jobs reports, we must consider the underlying issues that affect Americans directly rather than just the headlines.

What we uncover might shape whether our elected leader champions free-market flourishing or leans toward the big-government ideologies our forefathers warned against.

​Thank you for listening to the 29th episode of "This Week's Economy," where I briefly recap and share my insights on key economic and policy news.

​Today, I cover:

1) National: No government shut down as Congress passes a continuing resolution budget, House Speaker Kevin McCarthy kicked out with a new speaker to be voted in next Wednesday, presidential candidate Nikki Haley bashes excessive government spending and signs Taxpayer Protection Pledge as all candidates should, and latest jobs report reveals overall weakness;

2) States: Americans for Tax Reform released its Sustainable Budget Project for states that I helped author and Texas will have another special legislative session this Monday to discuss passing Universal School Choice; and

3) Other: My latest op-eds, including one published by The Wall Street Journal with Grover Norquist on the national and state spending problems, and another published by The Daily Caller on why the FTC suing Amazon over antitrust concerns is a waste of time and taxpayer dollars.

Please subscribe to my work on your favorite platform, follow me on social media, share my work, and like or leave a 5-star rating to help me spread this message to the masses!

​This commentary was originally published at EconLib here.

Americans say the economy is the most important problem facing the country. But major headlines covering the latest jobs report for August do their best to downplay this concern. The New York Times’ headline covering the news was, “August Jobs Report: U.S. Jobs Growth Forges On,” but the economic reality is far less cheerful. 

Sure, the jobs report beat the consensus estimate by economists. But that high-level look at the data fails to address underlying issues keenly felt by many Americans that are apparent with more scrutiny. And these problems won’t be over unless policies out of D.C. substantially and quickly improve.

Last month, 187,000 jobs were added, according to the payroll survey, compared with the anticipated 170,000. But the jobs added in the prior two months were revised lower by a cumulative 110,000 jobs, bringing the net jobs added in August to just 77,000. This extends an ongoing trend of downward revisions over the last several months.

According to the household survey, the unemployment rate, a weak indicator of the labor market’s strength, jumped substantially from 3.5% to 3.8%. Coupled with news of slow wage growth of just 0.2% last month, there is growing concern among Americans trying to make ends meet. 

We know the higher unemployment rate isn’t from too few jobs available. The number of job openings has been nearly double that of those unemployed for a long time, though decreasing quickly. Instead, the higher rate suggests a sluggish economy in which there are more unemployed or ghost job openings from companies that do not intend to hire but want to gauge interest and competition.   

There is some good news. The labor force increased by 736,000, which raised the participation rate to 62.8% in August. This is the highest rate since February 2020, just before the shutdowns in response to the COVID-19 pandemic. 

More people entering the labor force and higher participation rates appear promising. However, the increase in the labor force was a combination of 222,000 more people employed, with the other 514,000 people becoming unemployed. And diving deeper, 4.2 million more adults remain not in the labor force compared with February 2020. 

Many of these individuals have been unemployed for years, so obtaining employment could be difficult due to a lack of productivity signals in their resume on top of employers dealing with a stagnant economy.

The rise in the unemployment rate, lackluster wage growth, and the possibility of unfilled job openings all point to a weak labor market. Add in ongoing stagflation, as too-high inflation continues, and Americans are rightly concerned about the future. 

Some blame the Federal Reserve for this weakness because of its fight to bring down inflation after creating it. However, Milton Friedman debunked this tradeoff between lower inflation and a higher unemployment rate decades ago. Specifically, there’s no long-run tradeoff between the two, so the Fed must focus on the single mandate of price stability instead. 

The Fed has been working to combat inflation by hiking its interest rate target to a multi-decade high of 5.5% and slowly reducing its bloated balance sheet. This is why you’ve seen car loan and mortgage rates soar to multi-decade highs. These higher rates significantly disrupt the new car and housing markets. 

But this is the resulting bust after the artificial post-pandemic “boom” as new money moves throughout the economy and manipulated interest rates create malinvestments. We felt the higher inflation rate last year from the Fed’s actions of close to 9%, and now it’s about one-third of that rate, but this remains about 50% higher than its 2% flexible average inflation target.

The Fed has stated that it may raise interest rates further. And I believe that it will be forced to raise its target rate to about 6% before this hiking cycle is over. But just raising this rate won’t be enough to curb inflation for long if Congress’ deficit spending remains unchecked. This will force the Fed to monetize it to avoid putting more pressure on Congress to get their irresponsible fiscal house in order.

President Biden and Democrats in Congress made this situation worse with the passage of the misnamed Inflation Reduction Act, which is likely to cost about four times the initial $300 billion estimate over a decade. Their wasteful spending, along with Republicans’ excessive spending before them, has led to a fiscal crisis, the most significant national threat. 

Congress will unlikely make the needed reforms to the primary drivers of the deficit of mandatory spending programs like Social Security and Medicare because of rent-seeking in politics. This will likely result in the Fed not sufficiently cutting its balance sheet to stop inflation. Rather, the Fed will probably choose to increase its balance sheet, putting more inflationary pressure on the economy when that’s the last thing it needs.

A vital measure of the economy known as real gross domestic output, the real average of gross domestic product and gross domestic income, has declined in three of the last six quarters. While I don’t want there to be a hard landing, this is the situation that central planners by Congress spending and taxing too much, President Biden regulating too much, and the Fed printing too much have left us. 

There will be efforts by the government to correct these government failures, but we shouldn’t double down on past mistakes. Let’s learn from these failures and remember the most recent lesson in the 1980s: President Reagan cutting regulations, Congress passing tax cuts (but spending too much), and Fed Chairman Paul Volcker cutting the balance sheet. 

Initially, the cuts to the Fed’s balance sheet contributed to soaring double-digit interest rates, and the economy suffered a double-dip recession. However, afterward, the economy was able to heal from the prior hindrances of past presidents, congressional members, and the Fed, resulting in a long period of economic prosperity, which is often called the Great Moderation.  

What we have today is an economy where the government is growing, and markets aren’t as much. This must be reversed. When workers, entrepreneurs, and employers are free to engage in voluntary transactions, competition thrives, innovation flourishes, and resources are allocated efficiently.

Moreover, free markets promote consumer choice and personal freedom. When government interventions, such as wasteful spending, excessive regulations, and high taxes, are removed, markets can function more efficiently and respond dynamically to changing economic conditions.

Striking the right balance between constitutionally limited government functions and preserving the freedom of markets is crucial for achieving a vibrant and prosperous economy.

Rising unemployment, stagnant wages, and the specter of inflation require a multifaceted approach. Raising interest rates hasn’t been enough. The government must focus on responsible fiscal and monetary policies, including reducing government spending, addressing burdensome regulations and taxes, and substantially cutting the Fed’s balance sheet. 

​Americans are still suffering, and there is no time to waste in aggressively assessing these measures that cause economic strain so that people can get back to flourishing instead of merely “making it.” 

Today, I cover:

1) National:

• Shocking findings from the latest poverty report by the U.S. Census Bureau, including decreased real (inflation-adjusted) median household income and increased supplemental and child poverty rates.
• Median weekly real earnings have declined the most so far under Biden than any other president since 1980 except for Bush, Sr. No wonder many Americans feel pessimistic about the future. 
• New CPI report shows an elevated inflation rate. Prices are much higher now than when Biden became president.
• The combination of these indicates a weak economy from bad D.C. policies, as I recently explained at Econlib, and what to do about it.

2) States: Which states are seeking more tax reductions after lowering state income tax over the past three years?

​3) Other: My thoughts on the DOJ lawsuit against Google for violating antitrust laws and why I believe it's an attack on consumers and capitalism. 

​You can watch this TWE episode and others along with my Let People Prosper Show on YouTube or listen to it on Apple Podcast, Spotify, Google Podcast, or Anchor. Please share, subscribe, like, and leave a 5-star rating!
​
For show notes, thoughtful insights, media interviews, speeches, blog posts, research, and more, please check out my website (www.vanceginn.com) and subscribe to my newsletter (www.vanceginn.substack.com), share this post, and leave a comment.

Americans say the economy is the most important problem facing the country. But major headlines covering the latest jobs report for August do their best to downplay this concern. The New York Times’ headline covering the news was, “August Jobs Report: U.S. Jobs Growth Forges On,” but the economic reality is far less cheerful. 

Sure, the jobs report beat the consensus estimate by economists. But that high-level look at the data fails to address underlying issues keenly felt by many Americans that are apparent with more scrutiny. And these problems won’t be over unless policies out of D.C. substantially and quickly improve.

Last month, 187,000 jobs were added, according to the payroll survey, compared with the anticipated 170,000. But the jobs added in the prior two months were revised lower by a cumulative 110,000 jobs, bringing the net jobs added in August to just 77,000. This extends an ongoing trend of downward revisions over the last several months.

According to the household survey, the unemployment rate, a weak indicator of the labor market’s strength, jumped substantially from 3.5% to 3.8%. Coupled with news of slow wage growth of just 0.2% last month, there is growing concern among Americans trying to make ends meet. 

We know the higher unemployment rate isn’t from too few jobs available. The number of job openings has been nearly double that of those unemployed for a long time, though decreasing quickly. Instead, the higher rate suggests a sluggish economy in which there are more unemployed or ghost job openings from companies that do not intend to hire but want to gauge interest and competition.   

There is some good news. The labor force increased by 736,000, which raised the participation rate to 62.8% in August. This is the highest rate since February 2020, just before the shutdowns in response to the COVID-19 pandemic. 

More people entering the labor force and higher participation rates appear promising. However, the increase in the labor force was a combination of 222,000 more people employed, with the other 514,000 people becoming unemployed. And diving deeper, 4.2 million more adults remain not in the labor force compared with February 2020. 

Many of these individuals have been unemployed for years, so obtaining employment could be difficult due to a lack of productivity signals in their resume on top of employers dealing with a stagnant economy.

The rise in the unemployment rate, lackluster wage growth, and the possibility of unfilled job openings all point to a weak labor market. Add in ongoing stagflation, as too-high inflation continues, and Americans are rightly concerned about the future. 

Some blame the Federal Reserve for this weakness because of its fight to bring down inflation after creating it. However, Milton Friedman debunked this tradeoff between lower inflation and a higher unemployment rate decades ago. Specifically, there’s no long-run tradeoff between the two, so the Fed must focus on the single mandate of price stability instead. 

The Fed has been working to combat inflation by hiking its interest rate target to a multi-decade high of 5.5% and slowly reducing its bloated balance sheet. This is why you’ve seen car loan and mortgage rates soar to multi-decade highs. These higher rates significantly disrupt the new car and housing markets. 

But this is the resulting bust after the artificial post-pandemic “boom” as new money moves throughout the economy and manipulated interest rates create malinvestments. We felt the higher inflation rate last year from the Fed’s actions of close to 9%, and now it’s about one-third of that rate, but this remains about 50% higher than its 2% flexible average inflation target.

The Fed has stated that it may raise interest rates further. And I believe that it will be forced to raise its target rate to about 6% before this hiking cycle is over. But just raising this rate won’t be enough to curb inflation for long if Congress’ deficit spending remains unchecked. This will force the Fed to monetize it to avoid putting more pressure on Congress to get their irresponsible fiscal house in order.

President Biden and Democrats in Congress made this situation worse with the passage of the misnamed Inflation Reduction Act, which is likely to cost about four times the initial $300 billion estimate over a decade. Their wasteful spending, along with Republicans’ excessive spending before them, has led to a fiscal crisis, the most significant national threat. 

Congress will unlikely make the needed reforms to the primary drivers of the deficit of mandatory spending programs like Social Security and Medicare because of rent-seeking in politics. This will likely result in the Fed not sufficiently cutting its balance sheet to stop inflation. Rather, the Fed will probably choose to increase its balance sheet, putting more inflationary pressure on the economy when that’s the last thing it needs.

A vital measure of the economy known as real gross domestic output, the real average of gross domestic product and gross domestic income, has declined in three of the last six quarters. While I don’t want there to be a hard landing, this is the situation that central planners by Congress spending and taxing too much, President Biden regulating too much, and the Fed printing too much have left us. 

There will be efforts by the government to correct these government failures, but we shouldn’t double down on past mistakes. Let’s learn from these failures and remember the most recent lesson in the 1980s: President Reagan cutting regulations, Congress passing tax cuts (but spending too much), and Fed Chairman Paul Volcker cutting the balance sheet. 
Initially, the cuts to the Fed’s balance sheet contributed to soaring double-digit interest rates, and the economy suffered a double-dip recession. However, afterward, the economy was able to heal from the prior hindrances of past presidents, congressional members, and the Fed, resulting in a long period of economic prosperity, which is often called the Great Moderation.  

What we have today is an economy where the government is growing, and markets aren’t as much. This must be reversed. When workers, entrepreneurs, and employers are free to engage in voluntary transactions, competition thrives, innovation flourishes, and resources are allocated efficiently.

Moreover, free markets promote consumer choice and personal freedom. When government interventions, such as wasteful spending, excessive regulations, and high taxes, are removed, markets can function more efficiently and respond dynamically to changing economic conditions.

Striking the right balance between constitutionally limited government functions and preserving the freedom of markets is crucial for achieving a vibrant and prosperous economy.

Rising unemployment, stagnant wages, and the specter of inflation require a multifaceted approach. Raising interest rates hasn’t been enough. The government must focus on responsible fiscal and monetary policies, including reducing government spending, addressing burdensome regulations and taxes, and substantially cutting the Fed’s balance sheet. 

Americans are still suffering, and there is no time to waste in aggressively assessing these measures that cause economic strain so that people can get back to flourishing instead of merely “making it.” ​

Originally published at Econlib.