The Economy in Context: February 2020

The Bureau of Labor Statistics released its monthly Employment Situation Summary last week, and, of course, there’s been plenty written about it. As always, there’s plenty to unpack, so let’s get to the numbers.

The labor force participation rate edged upward to 63.4%, still well below where Jimmy Carter left it in 1980 at 64% and even further below where it peaked under George W. Bush right before the 2008 recession at 66.4%.

The preliminary number of net jobs created in January was +225,000, following a weak December. While the number of net jobs created beat expectations, those were not high expectations, and +225,000 is by no means a “strong” job number.

Numbers for November and December were revised upward, but there were revisions going back going decades, so the gain for both months of about +7,000 jobs is not meaningful, and the numbers for those months remain fairly average.

The federal funds rate remained steady at 1.75%, which indicates neither improvement nor immediate worsening of the market in the near term, however it’s telling that the Federal Reserve is still continuing to monetize debt.

The economy remains on very shaky ground, despite a strong sell by politicians to the contrary. The federal funds rate remains at crisis levels designed to stimulate an economy through a recession.

As much as the Republicans want to brag about the economy going into this election year, it’s not really been that much to brag about. 2019 was the weakest job creation year since 2011 (even after revisions).

For the decade of 2010-2019, Trump’s best “greatest job president of all time” economy ranks 4th, creating only an average of 192.83 thousand jobs per month, and two of his years rank in the bottom four.

Worse, Donald Trump is on track to be the first US president in American history to oversee an economy that doesn’t reach a very modest 4% GDP growth for even a single quarter during his entire term in office.

Liberty is For The Win!

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