The Economy in Context: August 2018

The latest Jobs Report is out from the Bureau of Labor Statistics, and the biggest pieces of news aren’t (or, at least, shouldn’t be) the fairly middle of the road preliminary jobs number or the relatively meaningless official unemployment number. What ought be much more interesting is that the June and July numbers fell by 50,000 jobs and labor force participation rate (LFPR) actually fell 0.2 points, from 62.9% to 62.7%.

Given that our federal government overestimated the current employment situation by the population of a small city and the LFPR has once again fallen within a stone’s throw of its 62.3% low, the manifestly fraudulent 3.9% official unemployment rate remained stable. Meanwhile, real unemployment ticked downward to an unadjusted 7.4%, but the large change (literally millions of people) in LFPR makes it just as difficult to compare to prior months.

Make no mistake, even if we take at face value (and absolutely nobody should) the initial estimate of 201,000 net jobs number, the very same report shows the number of employed persons decreased by 423,000 people in August from July. While many will simply write this off as the end of the Summer jobs season, the manufacturing sector, an industry demonstrably free from Summer job variations, also shed 3000 jobs.

jobsnumbers.png

Despite numerous deregulation victories and his incessant bragging in 2016, Trump’s economy has created more jobs than Obama’s second term (post recession) economy only 7 out of the last 20 months. The very uncomfortable GOP elephant in the room is that the economy hasn’t significantly improved under the current GOP regime, and the current occupant of the White House deserves a double serving of blame for this.

Notice that the federal funds rate is still well below the historic average of around 5.0%. At 2.0%, a full 3 points below 5.0%, the federal funds rate remains at stimulus rates a decade after the 2007-2009 mortgage crisis. The fact is that our economy is not as healthy as the Republicans want everyone to believe, and working class Americans on the margins of the American economy continue to cover the tab while bankers and fund managers cash in.

This is what it looks like when “the Swamp” is running America.

 


Liberty is For The Win!

 

 

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