‘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.”
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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Read MorePermanent 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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