There are a lot of things that look good in the last few quarters, and growth remains solid, particularly if the 3.5% preliminary GDP growth rate holds through revisions, but there are still some nagging doubts that won’t go away.
While the economy continues to churn along even into 2018, well beyond what I had predicted, two recent events indicate that the gravy train may finally be coming to a long overdue halt.
The current administration’s economy has only outperformed the average performance of the previous administration (post recession) eight months out of the last twenty-one months, or roughly one-third of the time.
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.
At 157,000 net jobs created, the preliminary numbers in the July Jobs Report from the Bureau of Labor Statistics came in well below the 190,000 jobs expected by market watchers, and well below the average established during Obama’s second term.
While the quarterly GDP growth rate hasn’t been below 2.0% since the first quarter of 2017, it also hasn’t been above 5.0% since the second quarter of 2014, and it’s a long way from the 7.0% rate in the third quarter of 2003.
If the labor force participation rate were still at its peak (roughly around 67%), roughly 10 million more Americans, that’s the entire population of New York City plus an additional 1.5 million people, would still be in the labor force.
It seems to me that it’s hard for Trump to be making America “great” again, if his economy is under-performing Obama’s economy.
As of yesterday, the DJI has only 24.64% of its gains since that date, representing a loss of roughly a third of its gains.
The Republican pundit class is lying right into our faces, pouring falsehoods and delusions right onto the heads of the tens of millions of Americans so desperate to believe in the infallibility of their political movement that they believe everything that they’re told.
The economy continues to roll ahead however isn’t without blemishes.
The main barrier to hiring an employee isn’t tax policy, regulatory policy, or even a recession…
By all objective measures, the economy generated fewer jobs in 2017 than the previous 3 years. This isn’t political punditry, it’s merely a statement of fact.
With the end of easy money, and the Federal Reserve looking to balance their books, there may be a tightening of capital in the very near future as that $4.5 trillion tab gets cleared.
GDP GROWTH DATA The GDP Growth Rate for 2017 Quarter 1 was officially 1.4%, considerably below the 15-year mean, which
The economy has been moving upward since about 2015, but, from a purely political standpoint, much of this growth could be attributed to the general impression that the political winds were going to change in Washington.
The latest helping of government data on jobs and the economy are remarkably rosy, but there are more than a few dark clouds surrounding the silver linings.
As we look toward the end of the year and the 4th Quarter, the change in political leadership could change the economic landscape, depending on how quickly the Congress and White House can enact whatever policy they plan on pushing forward.
With the election upcoming, we’ve no choice but to wait and see if the bubble economy bursts before or after the election.
Coupled with a broad base slow down in production and construction, we still appear on track for a recession starting in 3rd quarter or 4th quarter 2016, though it does not appear to be a traditional recession.
The primary drivers for 3rd Quarter or 4th Quarter economic downturn in the United States remain driven by domestic policies.