The Economy in Context: April 2019

The labor force participation rate fell to only 63.0%, just 0.1 point above where it was in January 2017. For some reference, the lowest the labor force participation has been in the last decade was 62.4% in 2014, and the highest labor force participation was at 65.8% in early 2009, right before the last recession.

The unemployment rate remained at 3.8% of a shrinking labor pie. However, the unemployment rate for black Americans remains at 6.7%, almost double that of white Americans at 3.4%. Among teenagers, age 16-19, black teenage unemployment rate is at 23.1% versus 11.8% for white teenagers.

There were 196,000 net jobs created in March, which is just below the average monthly job number for 2017-2019 (199,000 net jobs created) and below the average monthly job number for 2013-2016 (216,000 net jobs created). As the numbers stand now, only 541,000 jobs were created in the first quarter 2019.

The federal funds rate remains capped at 2.5%, which is half of the long-term average of 5.0%, and very much in the realm of fiscal stimulus. The administration is pushing for a lowering of the federal funds rate in order to create more economic growth, but this should be unnecessary in a growth economy.

There are a lot of indications, not least of which the rhetoric coming out of the White House, that the economy is not as strong as has been sold. Keep this in mind in the coming weeks, especially when the preliminary GDP numbers come out later this month, especially since Europe and China may be in recession.

Liberty is For The Win!

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