The Economy in Context: January 2020

The job numbers for December cement the status of 2019 as the weakest year for job creation since 2011 and put 2019 pretty far from the comparatively strong job creation seen in 2018. Caveats abound, however, and the state of the economy remains very much in question, particularly where the job creation market is concerned.

The labor force participation rate (the percentage of 16+ working age Americans currently either working or seeking work) remained at 63.2% in December and has not improved much since 2018, peaking in October of last year at 63.3%. For comparison, labor force participation rate was 64% when Jimmy Carter left office in 1980.

The net jobs created for October and November were both revised downward by a combined 10,000 net jobs, and there were only 145,000 net jobs created in December (preliminary), which is the worst December number since 2013. It also comes in as the third worst December of the decade (2010-2019).

Meanwhile, the federal funds rate remains at 1.75%, well below its long term average of 5%, which reflects the tenuous state of the economy, and the Federal Reserve continues to funnel money into the markets in an attempt to stave off a recession through raw liquidity, which, if the economy does slide into recession, will be catastrophic.

Overall, 2019 has been the third worst year for job creation of the decade (2010-2019), and the only thing that kept it from being worse is this Keynesian gambit designed solely to keep the economy floating through the 2020 election cycle. Unfortunately, most Americans voters, both Republican and Democrats, are too partisan to notice.

Liberty is For The Win!

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