Mixed Economic News Because Of The Hurricanes

Generally speaking, the economic news is good–the workforce participation rate is up and unemployment is down. That is a good thing. The only negative is the fact that according to CNBC America lost 33,000 jobs in the month of September. That loss is attributed to the hurricanes that hit Florida and the Gulf Coast states.

CNBC further reports:

Even with the surprise jobs number, the closely watched hourly wages figure jumped higher, to an annualized rate of 2.9 percent.

 Economists surveyed by Reuters expected payroll growth of 90,000 in September, compared with 169,000 in August. The unemployment rate was expected to hold steady at 4.4 percent. It declined even as the labor-force participation rate rose to 63.1 percent, its highest level all year and the best reading since March 2014.

“The lousy returns from the September jobs report will make little impression on observers, who essentially gave the labor market a free pass due to the impact of Hurricanes Harvey and Irma,” said Curt Long, chief economist at the National Association of Federally Insured Credit Unions.

An alternate number that includes discouraged workers as well as those working part-time for economic reasons also tumbled, falling from 8.6 percent to 8.3 percent, its lowest reading since June 2007.

The Workforce Participation Rate increased to 63.1. The following chart showing changes in the Workforce Participation Rate is from the Bureau of Labor Statistics:

As you can see, the rate is slowly inching upward.

According to Bloomberg News, Americans are going back to work.

Bloomberg reports:

Americans are coming off the labor market’s sidelines at a pace that intensified in September.

The number of people going from out-of-the-labor-market into jobs jumped to an all-time high last month, the Bureau of Labor Statistic’s employment report showed on Friday, even as the number of people flowing into unemployment fell. While these numbers can be volatile, they provide the latest confirmation that Americans are being pulled into work as the labor market tightens.

The positive changes in the economy are the result of the deregulation that has been going on since President Trump took office. There is still more deregulation needed. If all or part of the President’s tax reform proposals are put into effect, those reforms will also help encourage economic growth.

The Business Optimism That Surrounds President Donald Trump

President Trump has been in office for about two weeks. He has issued a number of executive orders that he believes will help restart the American economy, but he really hasn’t been in office long enough to see very much in terms of results. However, what he has done is increase optimism, which does influence the business climate.

Yesterday the January jobs report was released. Hot Air posted a story.

Here are some of the highlights:

Total nonfarm payroll employment increased by 227,000 in January, and the unemployment rate was little changed at 4.8 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in retail trade, construction, and financial activities. …

After accounting for the annual adjustments to the population controls, the civilian labor force increased by 584,000 in January, and the labor force participation rate rose by 0.2 percentage point to 62.9 percent. Total employment, as measured by the household survey, was up by 457,000 over the month, and the employment-population ratio edged up to 59.9 percent.

…U.S. job growth surged more than expected in January as construction firms and retailers ramped up hiring, which likely gives the Trump administration a head start as it seeks to boost the economy and employment.

Nonfarm payrolls increased by 227,000 jobs last month, the largest gain in four months, the Labor Department said on Friday. But the unemployment rate rose one-tenth of a percentage point to 4.8 percent and wages increased modestly, suggesting that there was still some slack in the labor market.

This is the chart on the workforce participation rate since 2007:

It may be a slow climb, but we are at least moving in the right direction.

The Economy By The Numbers

On Friday, Investor’s Business Daily posted their analysis of the recent jobs report. The report was more positive than some recent reports, but there were still a few problems.

The article reports:

The alternative measure used by the Department of Labor based on the household survey, showed job growth was even swifter, with a gain of 485,000. Best of all, nearly half a million Americans on net entered the labor force, helping reverse for now a horrid slide in labor market participation.

The participation rate now stands at 62.6%, up from 62.4% in September. But we’re still way behind the pre-recession high of 66.2% in 2007. A record 94 million Americans over the age of 16 are not working or looking for work.

Average wages were down a notch to $25.24 — bad news on a number of fronts. Real median wages have now been flat for almost a decade. It looks like a lot of those new jobs in December were at McDonald’s or Wal-Mart. About 37,000 came in bars and restaurants. The painful pattern of this recovery is that the jobs gained don’t pay as much as the jobs that have disappeared.

The article also address the falling oil prices:

Low oil prices are normally good news for the economy, but their relentless decline of late is a symptom of weak global demand from producers. The likelihood of any growth-oriented policy changes in Washington on regulations, taxes, ObamaCare or trade promotion seem remote in the near term. And the Fed is warning of three or four more interest-rate hikes later in the year.

Also on Friday, Donald Trump, the Republican front-runner for president, proposed a 45% tariff on Chinese goods and services. It’s hard to be bullish in such an environment.

We need some serious changes in economic policies in order to grow the economy. Hopefully the election in November will bring those changes.

This Sort Of Logic Makes My Head Hurt

Yesterday the Daily Caller posted an article about Hillary Clinton’s latest stand on illegal immigration.

The article includes Mrs. Clinton’s latest statement on the subject:

Often times when I have conversations with people who are fearful about immigration reform, their fears are rooted in the feeling that they are losing jobs that are going to people who are undocumented. And part of the reason that fear has a reality to it is because if people can pay you six dollars an hour, because you are undocumented, then why would they pay somebody who already is a citizen what the minimum wage or the prevailing wage should be?

So my argument is, the quicker we can legalize the people who are here, the better the job market will be for everybody because you will not have a group of people who are taken advantage of, and you will not have others who feel as though, and to some extent it is true, they are losing jobs because this group that is being taken advantage of is paid so much less and being treated so much worse.

So my argument to people who worry about comprehensive immigration reform and the effect on their jobs is: it’s just the opposite. The sooner we can get to legalization, the better the job market will be for everybody.

The explanation not given is how adding millions of workers to a struggling jobs market will make things easier for Americans seeking jobs.

Yahoo News reported today:

The ADP (Automatic Data Processing) read came in below estimates at 169K for April vs. estimates of about 205K – the second monthly tally under 200K in a row after 11 straight months of coming above that level. Not only did the April jobs tally miss the mark, but last month’s already-soft reading was further revised down. This doesn’t bode well for Friday’s government jobs report the consensus expectation for the BLS report is for ‘headline’ gains of 220K (per Bloomberg.com), which includes government jobs. As such, this ADP report will most likely prompt folks to lower their estimates for the Friday jobs report.

Adding millions of people to the jobs market at this time is not a good idea. All it will accomplish is to put more people on welfare and unemployment programs and eventually bankrupt the federal budget. It would be better to encourage those here illegally to return to their home countries.