The Economy in Context: March 2019

Preliminary numbers from the Bureau of Labor Statistics came out for February, and they are not strong. Let’s start with labor force participation at 63.2%, for the second month in a row. It’s technically an improvement of 0.3 points above 62.9%, where it was on January 2017, but it’s still only 0.3 points above 62.9%, and that’s just bad.

As far as net jobs created in February, the preliminary jobs number were a meager +20,000. This is significantly below the numbers posted in December and February, which were both revised upward in the latest report, from +222,000 to +227,000 in December, and from +304,000 to +311,000 in January, but that’s not February.

The federal funds rate was unchanged in the month of February at 2.5%, sitting at half of the long-term average of ~5.0%, and well in the territory of stimulative fiscal policy. Thanks to continued economic softness, the Eurozone interest rates have been flat-lined at 0% since 2016, as Europe teeters on the edge of a serious recession.

The only thing keeping the United States economy out of a significant recession have been low interest rates that have been imposed on banks since 2008, but, as the Eurozone proves, even “free money” (0% interest) can’t save inefficient markets. It’s clear having too many people out of work (LFPR of 57.3%) for too long has crippled these economies.


Liberty is For The Win!

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