The New York Times reports that the latest jobs numbers add to a string of encouraging economic reports. Many estimates for growth in the second quarter are bouncing above 4 percent. The manufacturing sector buzzed with activity last month, and spending on construction rose. New jobless claims are dragging along at historically low levels. And many consumers displayed their confidence in the economy by kicking off the summer with a new car purchase.
213,000 jobs were added last month. Economists had expected a gain of about 200,000.
“The trends are strong,” said Jim O’Sullivan, chief economist of High Frequency Economics. Over the past year, average monthly payroll gains have hovered around 200,000, and hiring has been running ahead of growth in the labor force.
As the jobless rate falls, employers’ complaints about their inability to find qualified, reliable workers mount.
“There’s more jobs than there are people available for jobs — at every level,” said Joe Galvin, chief research officer of Vistage, an association of small-business owners and executives. In a Vistage survey last month, an overwhelming share of employers spoke of their frustration in finding people to fill openings on the factory floor and in the executive suite, Mr. Galvin said.
To retain workers as well as attract new ones, employers say they are increasing pay, sweetening benefits packages and trying to create an appealing work culture.
Paul Plante says
With respect to jobs, just today, Marketwatch, in an article by Jeffry Bartash published July 10, 2018 @ 1:07 p.m. ET informed us as follows:
Job openings, meanwhile, fell to 6.64 million in May from a record 6.84 million as companies filled more open positions.
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With respect to the “Trump economy,” we learned this in the Marketwatch article “Consumer credit growth accelerates sharply in May” by Greg Robb published July 9, 2018 @ 3:43 p.m. ET, as follows:
Consumer borrowing picked up in May, according to the Federal Reserve on Monday.
Total consumer credit increased $24.6 billion in May to a seasonally adjusted $3.9 trillion.
That’s an annual growth rate of 7.6%, which is the fastest pace of credit growth since November.
Economists has been expecting a $12.4 billion gain, according to Econoday.
Credit grew a revised $10.3 billion in April, up from the prior estimate of $9.3 billion.
Revolving credit, like credit cards, surged in May, rising by 11.4% after a 1.3% gain in April.
This is the biggest increase since November.
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That, of course, is great news for the usurers and rentiers who make their money off of people going further and further into debt, but it is questionable as to any real benefit to the American economy.
Just before the GREAT RECESSION, it must be recalled, consumer confidence in the American economy was at record heights.
And in 1929, just before the GREAT DEPRESSSION, Americans were heavily in debt just as they are today.
In the meantime, as we learned from a Slate article entitled “Trump Celebrates Tax Bill With Mar-a-Lago Friends: ‘You All Just Got a Lot Richer’” by Daniel Politi on Dec. 24, 2017, Trump’s rich friends are doing quite well thanks to him, as follows:
President Trump was in a celebratory mood on Friday night and told a group of his wealthy friends, “You all just got a lot richer” after he signed the tax cuts into law.
Trump reportedly uttered the words to a group of friends who were having dinner nearby at Mar-a-Lago, including two friends who spoke to CBS News about the remark.
Anyone spending time at what has come to be known as the “Winter White House” is not exactly suffering economically, considering the initiation fee is $200,000 and annual dues are $14,000.
Paul Plante says
With respect to the “Trump Economy continues to gather steam,” this following sentence was from the Marketwatch article “Tech rally pushes Nasdaq to record as stocks rebound broadly” by Mark DeCambre and Ryan Vlastelica published July 12, 2018, to wit:
Moreover, the 12-month gain for CPI rose to a 6-yr high of 2.9%, reflecting a U.S. economy that is running hotter than anytime since the 2007-09 recession.
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Said another way, while the federal reserve sits on the sidelines and cheers, we, the people of America, once known as citizens, now known merely as “consumers,” or cud-chewers, are getting gouged. big time, which is really what this so-called GDP actually is – an index of how much we are getting gouged on a monthly basis.
With respect to us getting gouged and hosed at the same time, since we common folks are paying the freight for one of the biggest upward transfers of money in this nation’s history, the Wall Street Journal, in an article entitled “U.S. government revenue drops after tax cuts” by Ben Leubsdorf and Richard Rubin published July 12, 2018, informed us as follows:
Corporations taking advantage of new, lower tax rates reduced their payments to the federal government last month.
The Treasury Department on Thursday said government receipts fell 7% in June compared with the same month a year earlier, including a 33% drop in gross corporate taxes.
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The Trump economy is “running hot,” which means the rate at which we are getting gouged is accelerating, and in the meantime, corporate profits are increasing, which is fueling a stock market rally, which is then used as “proof” that the trump economy is working just fine, which it is, if you are one of the ONE PERCENT.
In the meantime, the Wall Street Journal article continued as follows:
More broadly, the federal deficit is swelling as government spending outpaces revenues.
The budget gap totaled $607.1 billion in the first nine months of the 2018 fiscal year, 16% larger than the same point a year earlier.
So far in the current fiscal year, which will end Sept. 30, total spending rose 4% compared with the same period a year earlier and total revenues rose 1%.
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The rich get richer, and the common people pay the bill.
God bless America, ain’t it?
Paul Plante says
Why there has been a boost to the so-called Trump economy can be seen in this Marketwatch article by Sunny Oh published July 16, 2018, as follows:
Retail sales in June came in at a 0.5% increase, matching the forecast of a 0.5% increase from economists polled by MarketWatch.
The boost in spending comes after data showed the rise in consumer prices hit a six-year high.
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People weren’t spending more because they wanted to; they were spending more because of the price increases.
The so-called Trump economy is based on gouging the **** out of the average American.
Jack those prices right on up to the sky and squeeze them til they holler.
It reminds me of the story of the goose that laid the golden egg.
Note: This is silly. Prices are going to continue to rise, so get used to it. With unemployment at under 4%, everyone from from service sector to subcontractors is charging more. Labor costs, as they rise will be felt across the market. You’ve always got Canada though.
Paul Plante says
Prices are indeed continuing to climb.
This is from a recent Marketwatch article on the Philly Fed index in July by Steve Goldstein published July 19, 2018:
The price-paid index showed inflation very much a concern, as it rose to 62.9 from 51.8.
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It would seem that I am not alone with my thoughts about prices rising.
But I would bet the federal reserve and the Trump administration both think prices can keep rising forever, just like housing prices before the GREAT RECESSION.
Paul Plante says
Costs are rising, but pay is not, or said more properly, inflation is rising at the same rate as wages, or slightly faster.
For many years now, the policy of the federal reserve has been to keep wages low.
So the American worker never can get out from behind the plow.
In the meantime, American corporations are reporting record profits.
High-level executives are doing quite well, but not their workers.
As to prices always rising, of course they can.
I remember Alan Greenspan, the noted guru in charge of the federal reserve saying after the housing market crash that they thought housing prices would keep going up.
How stupid.
And look what happened to copper so many years ago – as the price kept rising up into the stratospherically ridiculous, people like myself stopped buying it and switched to alternatives, or simply boycotted the market and did without.
God bless America in that regard and **** the gouging speculators who are parasites on the American economy.
(Yes, I am an unreconstructed Teddy Roosevelt progressive)
As prices go up, more and more people stop buying, which is what is happening now, as prices become quite frankly ridiculous.
Just yesterday, in fact, in the Marketwatch article “Oil price drops on talk of increased global supply, slowdown in economic growth” by Myra P. Saefong and Christopher Alessi published July 16, 2018, this is what it had to say on that subject:
The U.S. government is “coming under increased pressure as a result of rising gasoline prices, with national average gasoline prices up almost 16% since the start of the year,” according to analysts at ING Bank.
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To the point that Trump is pressuring the Saudis to pump more oil to lower the price, because the more the common person has to pay for gas, the less they have for all the other stuff.
That is the same basic economics I studied back in the 1960s.
As to Canada, the land of ice and snow, what possible relevance do they have to this discussion about the American economy?
None that I can see as an American citizen, anyway.
If they have problems up there, they will have to solve them on their own.
Paul Plante says
Wage growth is an especially thorny issue because median wages have been stagnant for several decades, causing a deteriorating standard of living for millions of middle- and low-income Americans.
For an economy that garners more than two-thirds of its activity from consumer spending, stifling wage growth could be actively detrimental to a longer-term recovery, including by forcing consumers to rely increasingly on dangerous loads of debt.
– From Business Insider, “The Fed seems to be giving up on a key driver of the economy” by Pedro Nicolaci da Costa Dec. 11, 2017
Paul Plante says
And then there is the fed beige book to consider, from the Marketwatch article “Worker shortages, rising costs hemming in a U.S. economy bursting at the seams, Fed’s Beige Book finds” by Jeffry Bartash published July 18, 2018, as follows:
The rapidly expanding U.S. economy is running out of room to grow any faster as shortages of skilled workers and rising costs of raw materials handcuff businesses, the Federal Reserve said.
“Economic activity continued to expand across the United States,” the Fed said.
The resurgent economy is not all cream and sugar, though.
Many companies can’t find enough skilled workers and in some cases they are turning aside new business.
Others say they have to pay more for critical raw materials such as steel and lumber, a problem exacerbated by recent tariffs.
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Again, we are back to prices rising, as we see from the following:
Another problem companies face is rising costs for raw materials and other supplies.
They are paying for more gas and oil, construction materials, metal and shipping, among other things.
Recent tariffs have raised prices on steel and lumber.
“Manufacturers in all districts expressed concern about tariffs and many districts reported higher prices and supply disruptions that they attributed to the new trade policies,” the report said.
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Will any of that make a difference to anyone?
All I can say is stay tuned.
Paul Plante says
Boy, does it ever:
The biggest worry for companies are rising prices.
IHS Markit said the increase in what companies charge rose at the fastest clip since the firm first began to collect information in the fall of 2009.
That is from the Marketwatch article “U.S. economy growing steadily in July, Markit PMIs show” by Jeffry Bartash published July 24, 2018.
As to another type of “steam” that the Trump economy is gathering, we have this from the CNBC article “Trade war bailout: Trump administration plans to offer $12 billion in emergency aid for farmers hurt by tariffs” by Tucker Higgins and Kayla Tausche on 24 July 2018, to wit:
Retaliatory tariffs on goods like soybeans, pork, and beef have hit farmers’ bottom lines in key electoral states like Pennsylvania, Wisconsin, North Carolina, Ohio and Iowa.
Trump praised his administration’s tariff policy on Tuesday in an early morning post on Twitter.
“Tariffs are the greatest!” he wrote.
The post met with some pushback from lawmakers, including Sen. Pat Toomey, R-Pa., a member of the Senate’s banking and finance committees.
“Tariffs are not great,” Toomey told CNBC Tuesday.
“They are taxes, paid by Americans, that harm consumers, workers, and companies.”
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To help the farmers Trump’s trade war has hurt, Trump now needs to spend an additional $12 billion in aid to farmers hit by tariffs on their goods, an emergency bailout intended to ease the pain caused by Trump’s escalating trade war in key electoral states, Secretary of Agriculture Sonny Perdue told reporters Tuesday.
In response, Casey Guernsey, whose family has been farming in Missouri since the 1840s, said the Trump administration’s plan was not sustainable.
Guernsey, a spokesperson for Americans for Farmers and Families, told CNBC Tuesday that the plan could heighten uncertainty in what’s already a down market.
“You only have so many calves that are born every year, and there’s only one time to harvest a crop, so you really have to make the best decision you can on any given day for the upcoming year,” Guernsey said.
“We don’t want to pin our hopes on a check from the government every month.”
A group representing soybean farmers also came out against the administration’s plan, and pushed for the elimination of tariffs.
“While soybean growers appreciate the Administration’s recognition that tariffs have caused reduced exports and lower prices, the announced plan provides only short-term assistance,” the American Soybean Association said in a statement.
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When it comes to the American economy, Trump is a raging bull in a small china shop.
How much damage he will ultimately cause to the American economy remains to be seen, so be sure to stay tuned to this same station.
Paul Plante says
According to Trump in a CNBC article by Tucker Higgins on 27 July 2018, the economy is steaming along bigly thanks to him:
“The trade deficit, very dear to my heart because we’ve been ripped off by the world, has dropped off by more than $50 billion,” Trump said Friday.
But in a Marketwatch article entitled “Trade gap widens in June as tariff boost to exports fades” by Steve Goldstein published July 26, 2018, the U.S. Commerce Department seems to be telling quite a different story:
The trade gap widened in June as a one-time to boost to inventories ahead of the introduction of tariffs faded.
The Commerce Department reported a 5.5% widening of the U.S. goods trade deficit to $68.3 billion.
In May, companies raced to ship agricultural products, namely soybeans, ahead of tariffs that China was readying in response to the levies the U.S. was imposing on a range of Chinese goods.
After a 14.1% surge in the export of foods, feeds and beverages, exports of those products fell 0.5% in June.
Consumer goods exports fell 8.6% and vehicle exports sank 6.1%.
While exports in total fell 1.5%, imports rose 0.6%, helped by rising demand for consumer goods and vehicles.
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I wonder who has that right and who is feeding us the fake news.
Paul Plante says
Staying with Trump’s claim in a CNBC article by Tucker Higgins on 27 July 2018, that “The trade deficit, very dear to my heart because we’ve been ripped off by the world, has dropped off by more than $50 billion,” a Marketwatch story entitled “U.S. trade deficit remains on track for 10-year high after climbing 7% in June” by Jeffry Bartash published Aug. 3, 2018 fails to provide corroboration:
The trade deficit rose 7% in June to mark the first increase in four months, keeping the U.S. on track to post the largest annual gap in a decade even as the Trump White House escalates tariffs in an effort to bring it down.
The deficit climbed to $46.3 billion from a revised $43.2 billion in May, the Commerce Department said Friday.
The U.S. trade deficit added up to $291 billion in the first six months of 2018, compared with $272 billion in the first half of 2017.
U.S. exports fell 0.6% to $213.8 billion just a month after hitting a record high.
The biggest drop was in new cars and trucks.
Exports could soon taper off sharply, though, as the tariffs kick in.
Imports rose 0.6% to $260.2 billion.
The U.S. imported more oil and pharmaceutical drugs.
Oil imports were the highest in 3½ years.
Tariffs imposed by President Trump on foreign steel and aluminum appeared to have an effect.
Imports of both metals sank in June.
Although Trump claimed last week that his administration had cut the trade deficit, it’s actually still going up.
The U.S. has run trade deficits for years, and it’s unlikely that any president could quickly reduce them.
The U.S. doesn’t even produce many of the goods, such as cellphones, that it imports from China in mass quantities.
An intensifying trade war with Chinese is a wild card, but most economists predict the trade gap will increase a bit faster in the second half of the year.
If does, the annual deficit could surpass last year’s total of $552 billion and hit the highest level since 2008.
A bigger trade deficit could reduce gross domestic product, the official yardstick of the U.S. economy.
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So this is another story whose end is not yet in sight, so stay tuned, people, for the more that is yet to come.