The Economy Under President Trump

Breitbart is reporting today that the Labor Department has stated that initial claims for state unemployment benefits dropped 8,000 to a seasonally adjusted 207,000 for the week ending September 29th.

The article reports on the impact of Hurricane Florence:

Hurricane Florence, which hit North Carolina and South Carolina last month, affected claims, according to the Labor Department. The largest increases in initial claims for the week ending September 22 was in North Carolina. Claims in South Caroline rose by 2,830, the third largest rise behind Kentucky.

The article concludes:

Jobless claims, which are a proxy for layoffs, have been closely watched for signs that trade disputes would be a drag on the labor market. Earlier this year, economists predicted that the steel and aluminum tariffs imposed by the Trump administration would cost 400,000 jobs. That prediction now looks way too pessimistic.

The jobless claims data has no impact on the monthly employment report, which is scheduled for release on Friday. Bloomberg’s survey of economists sees nonfarm payrolls likely increased by 18o,000 in September after rising 201,000 in August. The unemployment rate is expected to fall one-tenth of a percentage point to 3.8 percent, an 18-year low first hit in May.

President Trump may not be the perfect role model for your son, but it is obvious that he is a very savvy businessman who is working for the benefit of all Americans. I hope all Americans will vote next month to elect people who will support his policies. His economic policies are obviously working.

The Positive Economic News Continues

Yahoo News is reporting today that jobless claims expectantly fell last week. (Why was it unexpected–the trend has been going downward for a while?) Because of this, the Federal Reserve is expected to raise interest rates next week to keep the economy from overheating. I have mixed emotions about this. We do have to get back to reasonable interest rates, but it seems as if the federal reserve also has a habit of overreacting and slowing down (or speeding up) the economy a little too quickly.

This is a chart of interest rates starting in approximately 2008 taken from trading economics:

As you can see, the rates were kept very low during the Obama Administration in order to avoid an economic crash. Ideally, the Federal Reserve will raise them very slowly so as to protect the economic growth we are currently seeing.

Yahoo News reports:

The dollar was trading lower against a basket of currencies. Prices for longer-dated U.S. Treasuries rose marginally and stocks on Wall Street were mixed. The labor market is considered to be close to or at full employment. Nonfarm payrolls increased by 223,000 jobs in May and the unemployment rate dropped to an 18-year low of 3.8 percent.

The jobless rate, which has declined by three-tenths of a percentage point this year, is now at a level where the Fed projected it would be by the end of this year.

The number of people receiving benefits after an initial week of aid increased 21,000 to 1.74 million in the week ended May 26. The four-week moving average of the so-called continuing claims dropped 13,250 to 1.73 million, the lowest level since December 1973.

…The strong job market conditions were also underscored by the publication on Thursday of the Labor Department’s Contingent and Alternative Employment Arrangements survey, which showed 1.3 percent of U.S. workers in May 2017 held jobs they considered temporary or did not expect to last beyond a year.

That is a decline from 1.8 percent in February 2005 when the government last conducted a similar survey.

When self-employed individuals and independent contractors were included, the share of workers was 1.6 percent in May 2017, down from 2.3 percent in February 2005. Most contingent workers were under the age of 25.

The Labor Department will publish its Contingent Worker Supplement report in September. It is expected to shed light on the so-called gig economy.

Like him or not, President Trump is a successful businessman who understands how economics works. It might be a good idea in the future to elect businessmen to the presidency instead of politicians.

The Real Unemployment Numbers

The Obama Administration has proudly announced an unemployment rate of 4.6% for November 2016. That’s nice, but that isn’t the real story.

CNS News posted a story yesterday explaining the 4.6 % number and using some other numbers to put that number in perspective.

The article explains:

Although the “unemployment rate” in the United States for November is 4.6% — a rate last reached 9 years ago in August 2007 – the “real unemployment” rate is much higher, more than double at 9.3% nationwide. 

Real unemployment, or the U-6 number, as calculated by the Bureau of Labor Statistics (BLS) includes “total unemployed, plus all marginally attached workers” and part-time workers age 16 and over.

As the BLS explains on its website, the “unemployment rate,” or U-3 number, “includes all jobless persons who are available to take a job and have actively sought work in the past four weeks.”

The other number that is important is the workforce participation rate. The chart below from the Bureau of Labor Statistics illustrates how that number has changed during the Obama Administration:

workforceparticipationrate1

The article at CNS News concludes:

While the unemployment rate for November 2016 was 9.3%, the last time it was at a level close to that, 9.2%, was in April 2008. From June 2008 through September 2015, the real unemployment rate was in double digits, fluctuating from 10.1% to a high of 17.1% and finally back down to 10.0% (in September 2015).

The real unemployment rate has been in the 9’s since October 2015

The 4.6% unemployment rate sounds wonderful, but since it does not include those Americans who are out of work and no longer looking for work, it is not a meaningful number. The American economy has not prospered under President Obama. Hopefully, putting a successful businessman in the White House will change the American economy for the better.

Is The Economy Getting Stronger?

Reuters posted a story today about the latest jobless claim numbers.

The article reports:

The number of Americans filing new claims for unemployment benefits last week increased to the highest level since early September, but the underlying trend continued to point to a strengthening labor market.

Initial claims for state unemployment benefits rose by 19,000 to a seasonally adjusted 316,000 for the week ended Jan. 10, the Labor Department said on Thursday.

Economists polled by Reuters had forecast claims falling to 291,000 last week. The prior week’s data was revised to show 3,000 more claims received than previously reported.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose by only 6,750 to 298,000 last week.

Notice that the number of jobless claims is rising–not falling. The article then goes on to imply that this is an indication of a strengthening economy. However, there is something the article fails to mention.

A website called ycharts has posted the following graph:

LaborForceParticipationRateA shrinking labor force is not a sign of a growing economy. Keep in mind that the unemployment rate is only based on the number of people who are in the labor force–therefore the actual unemployment rate may not be the one the government is citing. If the unemployment rate were calculated based on the number of people who are actually out of work and not looking for work, the number would probably be well into the teens. Again, we are being told the economy is strengthening, but that is not necessarily the case.

 

 

The Week After

Investors.com posted an article yesterday listing the things we have learned about the economy since last week’s election. It’s not a pretty list.

This is a chart from the article:

Some of the highlights are lower earnings, increased poverty, jobless claims increasing, inflation creeping up, coal plants closing, food stamp enrollment climbing rapidly and small banks going out of business.

What a mess President Obama has inherited from his predecessor.

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Be Careful What You Believe Between Now And the Presidential Election

Yesterday Fox Business posted an article about the jobless claims data reported this week.

The article reports:

A sharp drop in the number of weekly jobless claims filed last week was caused by the failure of one large state to report all of its claims, a Labor Department spokesman confirmed to FOX Business.

Initial jobless claims, which are a measure of the number of people recently laid off, fell by 30,000 to a seasonally adjusted 339,000, the lowest level in more than four years.

But the Labor Department spokesman said the numbers were skewed by one large state that underreported its data. The spokesman declined to identify the state, but economists believe California is the only state large enough to have such a significant impact on the overall numbers.

Evidently, the state that did not report their numbers forgot to include that stockpile of unprocessed claims in their tally for this week (which is the first week of a new calendar quarter),

This is the equivalent of saying all of your bills are paid because you are haven’t gotten to the pile of bills you left on the kitchen table. We are truly in the silly season and need to discount at least ninety percent of what we read or hear from the media. Just for the record, the number will be revised upward, but at a time when no one is paying attention.

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