A major economic shock has just hit the United States. On August 21, the US Bureau of Labor Statistics revealed that they had made a big mistake in the number of new jobs created over the last year. They admitted that the total number of new jobs they announced from March 2023 was overestimated by a huge amount—818,000 jobs that were reported simply didn’t exist! This is a massive miscalculation that has stunned many people.
The mistake is even clearer when you look at the monthly numbers. Previously, it was believed that around 242,000 new jobs were being added to the economy every month. But the real number was only about 174,000—a difference of roughly 30%. The big question now is: how could such a huge error happen?
Although there’s no sign of a cover-up or intentional deception, one thing is clear: the US economy isn’t as strong as it once seemed. This revelation comes at a time when the unemployment rate has already risen to 4.3%. This paints a picture of an economy that’s weaker than many politicians would like you to believe. The Federal Reserve, which is in charge of setting interest rates, may be forced to lower them in an attempt to boost the economy and avoid a recession. However, some economists believe that no matter what the Federal Reserve does, a recession is unavoidable. One expert even said, “Once people start worrying about a recession, you’re probably already in one.”
Just a few weeks ago, the economic outlook appeared much brighter. CNN was celebrating “historic” growth in the economy, with reports of 2.8% growth in the second quarter and strong consumer spending. Even the World Bank had praised the US economy for leading the global market. But now, with this job overreporting scandal, all that optimism seems misplaced. The truth is that the economy might be headed for some serious trouble in the near future.
Meanwhile, while the US is stumbling, China’s economy is still growing, even if not as fast as in previous years. The World Economic Forum recently highlighted some positive developments in China, such as its booming clean energy sector, which is responsible for 40% of the country’s economic growth. Private companies in China are also investing more in research and development than ever before. So while China is facing challenges, it’s still expected to grow at around 5% this year, which is better than any Western economy.
China’s growth is in stark contrast to the US, where things are looking more uncertain. Despite this, the Western media continues to focus on China’s economic difficulties, often ignoring the positive progress it’s making. For instance, one US newspaper claimed China’s economy had “slowed sharply” without acknowledging the broader picture.
At the same time, the lingering tariffs imposed by former President Donald Trump on China are still hurting both countries’ economies. These tariffs were intended to pressure China, but they’ve also led to higher costs for American consumers and businesses.
Of course, it’s important not to jump to conclusions based on just one weak jobs report. This doesn’t necessarily mean that a recession is certain. But it does raise doubts about the true strength of the US economy. As the Financial Times pointed out, it’s wise to be cautious when using national statistics to argue that the economy is strong—especially at a time when the stock market can paint a misleadingly rosy picture.
Right now, the future of the economy is like a race between the US and China. Imagine a 110-meter hurdles race. The US economy keeps tripping over the hurdles, while China’s economy, though slower than before, is still clearing them with ease.
