Douglas Murray Douglas Murray

A strange kind of recession

Getty Images

It’s possible that I owe Joe Biden some sort of an apology, however mealy-mouthed it might be. Last week I mentioned here the weird prevarication from the US government and its supporters over whether or not the US is technically in a recession. It arose from the news that the US had two successive quarters of negative GDP growth. Biden’s critics – myself included – leapt to declare the US in recession. According to the Bank of England, the UK is heading for a recession too, so there should be no especial shame in accepting the fact and then trying to deal with it.

But then last Friday the US jobs figures landed and it became clear that the situation in the country is curiouser than we might have predicted. Everybody was expecting a contraction in the economy. Yet when the jobs figures came out they showed the opposite. Payroll employment in the US rose by 528,000 in July – more than double what was predicted, edging the national unemployment rate down to 3.5 per cent. That figure is not explainable simply by saying that this is people getting back to work after Covid.

A similarly curious situation is occurring in the UK, where unemployment rates are near historic lows at 3.8 per cent and the number of payroll employees is far above pre-pandemic levels.

Something in this may feel distinctly familiar to readers. On the one hand the economy is terrible. The news grows more dire by the day. The average UK household energy bill has almost doubled in the past year, with more rises on the way. And yet speak to almost any business owner and they will tell you the difficulty they are having in finding people to fill jobs. Try to employ a workman in the south of England at the moment and you’ll find yourself engaging in a mission of subterfuge and contact-raiding that would make one of P.G.

Already a subscriber? Log in

Keep reading with a free trial

Subscribe and get your first month of online and app access for free. After that it’s just £1 a week.

There’s no commitment, you can cancel any time.

Or

Unlock more articles

REGISTER

Comments

Don't miss out

Join the conversation with other Spectator readers. Subscribe to leave a comment.

Already a subscriber? Log in