Thoughts on how all this very positive job news will play out in November? The Republican ads just seem to write themselves.
We need a more thorough analysis. In previous months, people going through the data have reported that itās mostly urban areas benefiting from the improvement. And that the drop is still in significant part due to fewer people in the job market. And, of course, there are the recent woes of the stock market. So we have no idea what this will all look like to voters in a few months.
Many employers say itās difficult to find qualified workers. But they have yet to significantly bump up pay in most industries.
Huh, weird coincidence.
Iāll go on record and say that this jobs report isnāt that great when you look past the headline. Itās a mixed bag.
On the one hand, you canāt use this report to say the economy is faltering. If HRC were President, youād look at these numbers and sayā¦ānot bad on the surface, but letās look behind to see if this translates to anything meaningful for the American peopleā.
On the other hand, I think if you take this report combined with some other factors, you can see signs that there is a real ceiling on growth, and a higher cost of living being imposed on American workers, so thereās a risk of the ground slowly shifting.
First, the unemployment rate went down for the wrong reasons. It went down due to lower labor force participation. So although the headline of 3.9% looks great, itās really a function of math and not what we would normally associate with lower unemployment.
Second, wage growth is flat and inflation is creeping up. Weāre seeing signs in terms of gas prices. Also, weāre seeing anecdotal evidence that the tariff war is taking a bite out of certain businesses that are tied to trade.
Third, long-term interest rates crept up over 3% and then dropped to 2.9%. That 3% number is a key factor. The housing inventory has also dropped. The tax cut is taking a bite out of the housing industry. Trumpism has taken a bite out of the tourism industry.
Fourth, there is the tax cut itself as a political matter. The Tax cut has made it difficult for Trump/GOP to take credit for the Obama economy. People view it as an unnecessary giveaway to the wealthy, and theyāre wary that the GOP bagman is coming for their benefits to pay for it as the debt and interest rates spiral upward. Voters want the Democrats in to check GOP excess to keep them from messing up the economy. That sentiment right there (which was reflected in PA-18 and other elections) demonstrates that voters inherently assume that the economy the GOP is running right now was inherited, not created, by them.
So we have an environment in 2018 where the cost of money is higher, the stock market is flatter, wage growth is flat, the debt is higher, inflation is higher, and employment growth is a little soft as compared to the 2016-17 baseline. Thatās kind of a meh message to take into the 2018 elections, especially when you promised that the tax cut would result in a āroaring 20āsā style growth or what people remember of the Reagan recovery in 1983-84.
In other words, Dems should ignore this report, focus on health care, wage growth, education, Trump and go win 100 seats in the House and a net gain of 3 or 4 in the Senate.
Dems should even date to be as dismissive as a Tea Partier in heat in 2010: āThis is an economy for rich, old, conservative men. Not for you.ā
Thanks. I hadnāt thought about the urban-rural split.
Thanks. I think these are all excellent points. What I think is particularly - and politically - aggravating is the the total silence from Democrats and the DNC, and their unwillingness to even try to create a negative narrative out of these facts. For example, why arenāt the Democrats going after the Republicans on the stock market ācollapseā, and on the galloping increases in the price of gas, and on the chaos in Trumpās policies thatās bringing chaos to rural and farm America. I think the Democrats overthink every development, and are more comfortable writing term papers than simple political attacks that can be understood by those voters who donāt have advanced degrees.
I donāt know where they get the pay data, but my business is having a hard time finding qualified employees and we have had to raise our pay across the board to attract new hires and to keep current employees. Our HR department tells the folks doing interviews not to wait. If somebody looks good on paper and in the interview,sign them up before they leave the building.
The tax cut is a stimulus in the middle of a good economy. It was bound to lead to a boom, but I am not sure the boom will last.
Excellent questions. It would seem our cultural warriors donāt really know or stand for anything beyond their little cultural issues. Democrats donāt really want to attract white people who are worrying about their stock market investments or the price of gas, and as I have been told on this very board, farmers deserve all the punishment they get because they are gun toting, bible thumping deplorablesā¦
See Donald told you heād make America great again!
Well the only thing Donald and Republicans have actually done was the tax cut. Doubt thatās made any change with employment. Hereās Krugmanās look at the tax cut and what Apple has done with it.
Just wait till we need ā those ā workers for the summertime crops ā¦
You can look at numbers all you want to ā¦
but when your fruit is rotting in the field ā¦ numbers donāt mean a lot ā
And youāre SURE to have something to say about it ā
But at the same time, there should be a significant visual impact with all the jobs having been lost due to the tax cut bonus that led to thousands being laid off - Carrier in Indianapolis being a prime example, but there are at least a dozen other corporations that paid off the payroll bonus and subsequently issued pink slips.
Iāve been waiting for that bump to hit and, right now, Iām not seeing it.
It takes a year or so for policies to show real impact in employment. Itās more of a lagging indicator. The Trump economy didnāt fully start until February when he had both his tax cut and budget in place (also Fed chair). In my view, the negative data weāve seen so far (slower employment/econ growth, higher long term rates, ballooning debt, higher inflation) is happening much faster than I expected.