August 4, 2021
The July data was supposed to be our first glimpse at what the job market looks like after half of the states have withdrawn from the federal unemployment subsidy — in effort to incentivize people to go back to work. But the jobs number came in lower, not higher.
Why? The move by state governors to reject federal unemployment money was offset by more "relief" government handouts.
Remember, the Biden administration launched the child "tax" credit last month. That seems to have kept people at home. And it's not going away. Biden has proposed running it through 2025. But as we've discussed, this is just another step toward the administrations universal income gameplan (i.e. my bet is, it's permanent).
As we've discussed, it's not really a credit. It's a direct payment. It’s cash. And it's not really a "tax" credit, as those that do not pay taxes, receive and will continue to receive direct payments.
So, this is the likely culprit for the continued labor shortage. And the ADP report today, telegraphs a "below expectations" government jobs report on Friday.