"This time it's different..."
1
I agree with your view about the phillip curve not being relevant in this new economy of low inflation and low unemployment. You need to look behind the numbers and would be concerned. Many people are stop working and working more part time jobs or two or three jobs. The bottom line is this economy still benefits the wealthy educated and large corporations. You need to look at the trillion dollar deficit which has fueled the economic growth along with the tax cut. Also, Americans have high debt in credit cards and student loan debt. There will be an economic slow down in the future with the President tariffs three possible wars (Iran North Korea Venezuela) end of tax cuts global economic growth slow down(especially China) high fuel cost automation replacing jobs Trump immigration policy and a low participation rate.(Labor Force Participation Rate in the US decreased to 62.80 percent in April from 63 percent in March of 2019, according to trading economics.)
2
As the comments here show, attentive citizens have a clearer view of the economy's real dynamics than economists do. Perhaps, immersed in data and theory, and saddled with a narrow and outmoded range of ways to use narrow and outmoded data sets and theory, professional economists are happy that they achieve a nearly-50% success rate when predicting future events. (Whereas your average working stiff feels vindicated to achieve similar results.)
I'm no economist, just a guy reading the news, but became clear decades ago that the journalists reporting on the economy have the job, at least twice a year, of reporting how surprising and puzzling the results are, when all the data pointed to a different result. Unprecedented. Hmm...
And every ten or 12 years, when mismanagement of our economy results in a "recalibration," moving wealth from citizens' pockets back into the accounts of corporations and financial institutions, journalists have the unfortunate task of making it sound like it is yet another shocking surprise--"the signs were there, but nobody saw it coming" kind of excuses that the public, however accustomed to hearing them, does not believe for a minute.
1
"tax cuts and deregulation are most likely part of the reason for the strong growth rates in 2018 and the beginning of 2019". According to who? or what? Conventional economic wisdom? I have to wonder why a piece making the argument that the old rules no longer apply nonetheless relies on another piece of conventional wisdom regarding the tax cuts and deregulation without any demonstration. For example, I read that a major source of job growth was in the healthcare sector, and mightn't the ACA have more to do with that than tax cuts and deregulation?
I suspect that Trump and the Republicans are giving with one hand while taking away with the other. Perhaps workers are earning more now, but Republicans would also have them spending more - much more - for their healthcare and retirement.
1
When the numbers don't match the reality, then one has to consider that the numbers are being measured incorrectly.
Similar to the debate about so-called "dark" matter and energy in the universe. The numbers didn't match the equation output, so they dropped in fudge factors called dark matter and energy.
How about if we start including all the people who are eliminated from the unemployment measuring because they have given up looking for work and have had to relegate themselves to a permanently lower stand of living? That would send the number probably up to 9-10% unemployed.
Sure jobs are available but too often they are not a match in physical location or skills or hours for those looking.
I'm over 65 and was forced to "retire" some years back because despite sending out many resumes and talking to numerous recruiters and networking where possible, I was unable to get something in my field, which was telephone software sales. When they found out how old I was and that I was out of corporate work for more than 6 months, it was effectively "Sorry, Charlie". I was told I would not be a "cultural" fit. In other words, younger people don't like working with older people. Apparently makes them feel inadequate or something. [lol]
2
How many of these jobs are part-time?
Apparently, someone working more than 1 hour per pay period is counted and may be counted again if the same person is working a second or third job.
The "unemployment rate" may be significantly understated as a result.
2
@mikek
"How many of these jobs are part-time?"
The amazing answer to that question is "less than zero."
Read carefully because this anti-intuitive requires more than a little insight.
First, in 2016, only 70% of the created jobs were full-time jobs. The other 30% were part-time jobs.
We know this because BLS tracks both total jobs and full-time jobs separately.
This changed dramatically in 2017 and 2018. 100% of all created jobs were full-time jobs.
In 2018, all 2.4 million jobs were full-time jobs.
Not only were all 2.4 million jobs full-time, but an additional 700,000 previously created part-time jobs were escalated to full-time.
You can see the enormous power of this amazing outcome by looking at the growth in real disposable personal income which increased $597 billion, up more than 140% over $244 billion growth in 2016.
1
The one thing that is for certain is the dizzying amount of wealth that is moving to the richest. The stratification of wealth is a real phenomena. The wage gains and the like are subject to the vicissitudes of the economy. The capital sucked into the super wealthy's pockets are permanent. Their ability to avoid taxation is real. Along with the concentration of wealth is a concentration of political power. The deregulation efforts of Trump will hurt consumers and imperil the environment.
1
@c harris. Considering the proven fact that the top 1% of income earners pay 38% of income taxes collected while the bottom 50% pay nothing or even less than nothing in income taxes it’s obvious who is avoiding taxes
1
"The job market had already been improving for years when President Trump took office, and its performance since then has been more continuation of the trend than an abrupt upturn."
Perhaps it depends on how you look at the job market. In 2016, 30% of the jobs created were part-time jobs.
That changed abruptly in 2017 and 2018. 100% of the jobs created in both years were full-time jobs. That abrupt change was amazing. What drove it? Most likely, the leap in consumer confidence that took place on election day in November of 2016. For two years, confidence had trended down. Now, it is above the 80th percentile of all historical records.
But, it is perhaps even more intense than that. No only were 100% of the jobs full-time jobs, the economy was so red-hot that it has escalated 700,000 of the previously created part-time jobs to full-time.
You really see this effect by the $597 billion increase in real disposable personal income in 2018. Up from the $244 billion in 2016.
So, while full-time jobs increased 1.56 million in 2016, they increased 3.1 million in 2018, a 100% increase.
Hard to describe this as a trend. It appears to be an abrupt cataclysmic departure, for the good. It may mean that taxation has a much greater effect on the economy than is commonly thought. Europe only grew 1.2% last year.
1
The labor force participation rate has fallen from 67% in 1999 to 63% now in 2019. The total work force would have at least 8 million more people if the labor force participation rate moved up to 67%. Then, the unemployment rate would be over 6%.
About a third of the workforce, especially those under 40, are self-employed. Those workers would prefer to be full time employees, not self-employed independent contractors. Information technology is used to reduce workers' status from "employee" to "independent contractor". IT also reduces working hours, pay, and benefits.
Using IT to hurt people, not help them, is a POLITICAL decision, not an economic decision. Our laws allow working people to be impoverished and corporations to be enriched. We can vote to change all that.
1
You start off with fair points about why the economy is doing well. Certainly Presidents get credit when things are humming along. And it appears the deregulation and tax cuts for the wealthy have done just that in this moment. The negatives of policy changes sometimes take time to be revealed. Let’s see.
Always hoping good times roll however, not at the expense of the constitution and the pillars of our democracy.
Indictments already in hand do not constitute a witch hunt. If we had a civil and decent leader who respected people and the institutions sworn to uphold, there would not have been an investigation. Additionally, I have a big problem sleeping with the enemy (Russia).
So if Trump acted legally and with goodwill. If he had reached out to lead all Americans instead of a hate filled minority base, his approval rating right now would probably be a record high. Pity for all of us he doesn’t care.
1
Economists are forever looking for see-saw "mechanisms" in the economy -- when X goes up, Y must go down. In the long haul, the "mechanisms" often fail.
They also attempt to apply game theory math to human decision making, assuming that folks understand what's in their best interests in the present and in the future and making economic judgments accordingly. Ha, Ha!
Economics is the language of class and political warfare. Hayek designed his economics specifically to rebut Marx and his Communist adherents. It isn't even vaguely a "science," although, like astrology, it's practitioners use a lot of fancy math to snow their clients into believing someone smart enough to use that math must "know something." Sadly, this is false.
By 2050, or so, computers may be powerful enough to track the movement of money and goods through the economy, providing that corporations can be forced to give up their data accurately.
At that point we may be able to detect chaotic recursive patterns resembling what we see in the weather, but don't count on it because the economy is not a "natural" system like the atmosphere. The economy is governed by human law, not natural law.
Economists are the "wizards" behind the curtain controlling the images that their employers want to project to the public. Their purpose is to persuade and reassure, not to make "scientific" predictions.
1
Government, leave the people alone and they’ll continue making this country great, the last hope of mankind.
1
There hasn't been the threat of inflation in 30 years. That has been the upside of free market, free trade globalism. The economic establishment has seemingly made neo-liberalism work. We've been here before or close during G.W. Bush and Clinton, even Reagan. Things look great for a while then crash. Them more tax cuts, deregulation, etc. The economy is built on a false foundation fueled by deficit spending, huge unnecessary and wasteful military spending, and creative finance. All just buying time. Until the economy is made to be more egalitarian and democratic and less reliant on people's fantasies it will never be right.
1
Yet I read elsewhere that most people -- even those with full-time jobs -- have trouble finding affordable housing. Most people are not being paid very much as compared with what most things cost these days, and it's only the massive imports of incredibly cheap consumer goods (created by workers in other countries who make even less) that keep people from noticing. In terms of financial security, ability to own a home, educate their children, take care of sudden medical emergencies -- most people are not doing well. And I say you can't call it a "good economy" when most people are not doing well.
3
I don’t get it. If someone had predicted in 2010 that unemployment would be at a 50 year low and interest rates still rock bottom with growth at 3%+ they would have been branded a dreamer, or worse a Republican by most. The terminally unemployable are getting jobs, bringing them out of the economic shadows. Cry all you want about the gig economy, but the demand for that kind of work suggests that many people want that kind of existence. The vast majority of Americans, nearly 140 million get their health insurance via their employer. I’m sorry, but if you want to work then get a job. There never has been nor will there ever be a guarantee to a $50k + benefits job to anyone who wants one. Not even Bernie can provide that.
3
Yes, the economic numbers are amazing - 50 year low unemployment with job growth for 10 straight years. Markets & RE values at all time highs, etc. etc. etc.
Why is inequality at a 50 year high? Why do 1 out of 4 US children live in poverty. Why are there more homeless than ever? Why do 80% of Americans live paycheck to paycheck in any given month of the year?
These numbers are also amazing - given we live in the richest country in world history.
The economy is humming along, while most Americans are still struggling...
Why?
3
@kckrause
"Why are 1 in 4 children living in poverty?"
Maybe because that's how they define poverty: the lowest 1 in 4 define poverty.
In truth, just a casual look at Census data shows that our "poor" have cars, cell phones, flat screen tvs, refrigerators, indoor toilets, internet connection and computers, shoes, multiple sets of clothes, showers, ovens, stoves and electricity.
In other words, by world standards, our poor are rich.
4
@kckrause
"Why do 1 out of 4 children live in poverty?"
Not quite. 18%, 1 out of 5.2. And, that number will be even lower for 2019. In 2018, ten all-time records were set for combined total employment of Blacks and Hispanics.
Even that number is deceptive. Census records reveal that such families have a car, cell phones, flat screen tvs, indoor plumbing, showers, toilets, stoves, ovens, sinks, forks, spoons and knives, kitchen tables, air conditioning.
By any world standard, our poor are rich, living above 80% of the world population.
Can we do better? Yes.
Why have our poor done so well? Income inequality.
In 1980, the top 1%, taxpayers with an AGI of $80,000 or more, paid $47 billion in taxes.
$80,000 adjusted for inflation is $237,000.
In 2019, taxpayers with an AGI of $237,000 or more paid $900 billion in taxes.
Nothing like this happens in other countries and the poor are the direct beneficiaries.
That's why our poor are rich by world standards: income inequality.
It's a good thing, the more the better.
4
@kckrause. Are you referring to effort inequality being at a 50 year high? If child poverty is such s big deal, let’s take Bernie’s millions and Warren’s millions and give it to the poor!
2
A great example of whistling past the graveyard.
I guess it didn't occur to Neil Irwin that perhaps the reason that "using data from a few decades in the middle of the 20th century to set policy in the 21st isn’t actually a good idea." isn't because the economy is different now due to a variety of technological, demographic and structural differences, but quite simply because the way that data is generated has changed.
The way that both inflation and unemployment are measured now has been tinkered with countless times in the last 60+ years, or outright overhauled to fit one political agenda or another. Example: to vocal complaints from Democrats, Reagan decided in the 1980s that members of the armed forces should be included in the employment numbers, which gave his economics numbers a 'bump'.
2
These numbers will please Trump supporters, but they no longer reflect the situation on the ground. Americans don't have health insurance, or they have it, but it chained to a job that may not last long.
Our infrastructure is in third world condition so where's that new wealth going?
We live in an Autocratic plutocracy, so I pay no attention to antiquated economic indicators.
Congress is now irrelevant since Republicans are all in on plutocracy controlled by corporations and the 1%.
3
No big surprise. The stimulus of deficit spending (isn't the yearly deficit going to be a trillion for the next few years?) and the stimulus of labor. When workers are pulled from the sidelines, many are more productive because of generally better education, another trillion and a half that hasn't been paid for. Set, game, match for the Plutocrats.
1
It always amazes me when I read comments about the booming job market and low inflation without any of the commenters making the point that the statistics underlying these claims are no longer calculated the same way. For example, the labor force is shrinking as shown by the decline in the participation rate. A massive number of people who are really unemployed are no longer counted. This is the major reason why reported unemployment is so low. As to inflation, it would considerably above the 1-2% level if it was calculated using a fixed basket as opposed to the equivalent standard of living approach that Greenspan, Boskin, & company advocated for in the 90s, and which has opened the door to all kinds of statistical abuses. The truth of the matter is that both unemployment and inflation are much higher than reported, probably around 7% and 6% respectively. The published numbers are a scam. Corporations and governments benefit, because wages and indexed payments are in line with the CPI, ordinary folks get hurt, because their experience has nothing to do with the published numbers.
4
I would really like to see the connection that tax cuts and derugulation play. I’d love a deeper dive. What industries are performing and which arent?. Which areas of the country has the most growth and which have the least?
What has derugulation done exactly? What are those regulations that you can connect with a straight line to increased economic activity.
And for taxes, who knows? A amore micro analysis could help
3
Define "gainfully employed". Be specific. My son-in-law builds vehicles for a large automobile manufacturer for approximately half the pay, in today's dollars, his predecessors did in the '50's and early '60's. I'm old enough to know better than to believe news flashes that the economy's "booming". Get real. It's not "booming" until every available and willing worker benefits!
2
This looks quite similar the argument of the new economy in the 1990s.
We experienced the end of the new economy in 2007.
I hope this article does not end up as another example of over-optimistic view which always claims new economic law when economy is booming.
1
Could these low inflation-low unemployment numbers be garbage in-garbage out? How many working age (18-65) men and women do we have in this country? What percent of them are actually employed in full-time, steady jobs? How many working age people have dropped out of the job market because they cannot find a job that uses their skills and pay a decent wage? In short, there are so many blanks to fill before one can arrive at a meaningful unemployment rate.
Low inflation is easier to account for; many people do not make enough money to spend on those goods and services that are used to calculate the inflation rate although they are working full-time or part-time. Add to them those discouraged people who are not seeking jobs and do not have income.
So, the booming job market-low inflation paradox is probably just an illusion, not a sign of the Great Trump Economy.
4
@Dodurgali
"Could these low inflation-low unemployment numbers be garbage in-garbage out?"
Nope.
The real data may even be better than this story tells. In 2016, 30% of the jobs created were part-time jobs.
In 2017, this changed dramatically, In 2017, 100% of the jobs creation listed by the Bureau of Labor Statistics were full-time jobs. The same was true in 2018.
That's stunning.
In fact, it was even better than that. Not only were 100% of the 2017 and 2018 job created full-time jobs but 700,000 of the previously created jobs were escalated to full-time.
We are in one of the greatest booms of all-time and it may lurch, but it isn't slowing down. In fact, it appears to be accelerating.
4
This article takes the position that low unemployment and low inflation tell you everything you need to know how great the economy is. And then goes one step farther to say that the combination is so wonderful that something new and unexpected must have happened.
I would take the point of view that the main thing that has happened is that the statistic tells you less than it used to.
First of all, we are living in a deficit funded boom. Stimulus does work, and we are running record deficits in good times. This is bad policy we normally don't do. We are borrowing from the future, compromising our ability to deal with real problems (education, infrastructure), and leaving us less prepared for when the money runs out.
As for the effect of that boom, wages are only barely keeping pace with inflation, and inequality has been drastically increasing. There are many reasons for the lack of inflation, but you can view it as the other side of the inequality coin. Prices and wages are staying low, because most of the population isn't benefiting. For that you can point, among other things, to globalization and the decline in the labor share of profits.
So there's no great mystery about what's going on. We're binging on credit and keeping profits away from the people who might spend them.
4
The money is pooling up and not circulating, therefore little inflation.
1
@James B. Huntington
"The money is ...not circulating..."
MZM velocity (rate of circulation) hit the lowest level ever recorded in the second quarter of 2017. By far the lowest, 1.301, more than 25% below the previous low of 1.774 in 1964.
When $16 trillion is moving 25% slower that's a big deal. We are missing $4 trillion in economic activity.
When a Nobel Prize winner's hypothesis is completely invalidated, that's a big deal.
Notice the complete lack of any discussion?
According to Milton Friedman's Nobel winning monetary hypothesis, if the Fed increased money supply, we wouldn't have had a great depression. Why? Because not only would money supply increase but also velocity.
We just applied his cure. Didn't work. Velocity fell like a bomb.
But, the cure moved billions from some pockets to others.
2
This morning: Super unemployment rates and number of new jobs, an AJSN (American Job Shortage Number) showing latent demand for 900,000 fewer positions, but not at all a tremendous report. Why not? See http://worksnewage.blogspot.com/2019/05/april-jobs-data-fine-month-with.html.
2
We have a booming economy without spending billions on preparations for an alien invasion as Krugman had suggested
1
I have a question: Why does anybody with two functioning brain cells believe the administration's numbers? We know Trump and his surviving administration officials lie when it serves their purposes, so why do we not at least suspect that their economy numbers are being cooked? Or, to put it another way, why does almost everybody take their numbers at face value? I don't.
3
@GMoore
"...believe this administrations numbers..."
Maybe, we don't believe these numbers because we know the real numbers seem to be much better.
In 2016, 30% of the jobs created were part-time jobs.
That changed dramatically in 2017 and 2018. 100% of the jobs in both years were full-time jobs. That's a big deal, stunning. We've never heard about that.
The 2017 and 2018 numbers were even better than that. Not only were 100% of the jobs created in these two years full-time jobs but the economy also escalated 700,000 of the part-time jobs created in previous years to full-time.
You can only see the true impact of this by looking at real disposable income growth which was an enormous $597 billion in 2018, the largest increase in history. Up from $244 billion in 2016. More than a 140% increase in just two years.
4
statistics don't tell the whole story. try having a PhD in English lit. = ZERO jobs in your field. but it's a great degree anyway. i hear about real people. Numbers are one component. re: the "ridiculous witch-hunt" that, according to Donald Driver, "looks infantile and desperate" - wow!! What's infantile and desperate is 45 blocking every attempt of congressional committees to LEGALLY obtain information so that this thing can be wrapped up. The strategy is excellent: delay tactics (costing us money, costing us the work that Congress might instead be doing). Trump is a fog machine. Negativity, hate tweets (that are a crime, thankfully Twitter is dealing with it now), and domination of the media with his negativity. Encouraging Hate is what he's doing, and hanging the whole thing on the economy and job, which he inherited from you-know-who.
2
@Donald Driver - As Trump was so fond of pointing out during the Obama administration - unemployment stats do not tell the whole story. Nothing could be more true in the current administration. So many untold stories...
3
Who's factoring in the so-called "Gig Economy" ? Contingent employment has replaced sharecropping as America's most exploitive use of workers.
2
@Mike Licht. Except for the fact that every driver for Uber or Lyft, etc voluntarily chooses to work for them. They’re free to quit anytime driving for Uber is no longer profitable
3
The 2020 presidential election is 18 months away. Plenty can happen between now and then to affect the economy. Let's wait and see what happens.
2
I am happy that the economy is doing well, no credit to Trump -it is a continuation of the Obama economy juiced up by irresponsible tax cuts shifting the debt to future generations. But it is interesting to see journalists not talking about the second measure of unemployment that includes those discouraged to look for work, which now stands at 7.3%. During the Obama years the low unemployment figures were also accompanied by a "but" referring to the second measure which was about 9% towards the end of Obama's term. Goes to show that journalists are being intimidated by the far-right propaganda machine to bend over backwards to temper the enthusiasm when the news favors a Democratic President but not so much when it is a Republican president.
3
I wouldn't underestimate the chances that Trump's erratic behavior could have negative economic consequences. Remember that many recessions start with something unexpected. The tax cut and relaxation of regulations, those that have not been held up by the courts, may have contributed to the robust economy, but there is a price to pay for relaxing environmental regulations, both in health and economic consequences for the public at large. And there still is a dearth of quality jobs that pay enough to sustain a family. If you don't think so, ask your supermarket checker, store clerk, or ride share driver how many jobs they have. You will get a strong dose of reality.
2
Seems like significantly increasing the deficit year-over-year is supporting steady economic growth more than tax cuts/deregulation. Easy to do well when you're spending money you don't have. The deficit has increased from $585B (2016) to $666B (2017) to $779B (2018). That's a 33% increase in deficit spending in just 2 years.
If we had reduced spending in response to taking in less through taxes due to the cuts, I think you'd see a different economy.
2
Inflation is in stock and housing prices, health care cost, childcare and education costs.
2
The unemployment rate has been falling steadily since President Obama first term in October of 2009. NPR published an online piece about the low unemployment rate. They included two graphs from the Bureau of Labor Statistics, Federal Reserve Bank, St. Louis. Although there were a few bumps in the road, the rate went down without any of Trump's shenanigans.
2
Mr. Irwin seems to be suggesting that the lessons of the past are, well, passe. That the most fundamental laws of macro and behavioral economics such as "supply and demand" or "asset to debt" ratios may no longer be relevant in our calculus, is all too reminiscent of the "irrational exhuberance" that corrupted the traditional psychology of financial markets in the early 2000s. We all remember the resulting "Big Fall" in Sept, 2008. Or do we?
As for Trump's contribution, let's be clear; this is a debt-fueled expansion that ignores the longterm environmental cost of deregulation and continues to concentrate wealth creation in the top 1%, further exacerbating the already gross disparity of income between social and economic classes.
There is a price to pay for such ignorance and arrogance.
That's the safe bet.
1
I have serious doubt as to the data. In 1969 the Vietnam war was at its height. Federal spending was high and the draft was stripping young men from the labor market, and most of the baby boomer generation were yet to enter the labor market. Nothing compares to then. We had a partial government shutdown. We have budget cuts and tariff wars, while the baby boomer generation is retirement age. Something about the data smells rotten. The first question that comes to mind is whether the same methodology is used to determine the rate? Are we comparing apples and oranges?
1
Booming economy and low inflation jobs! What part of the country is that in? Not in my area! The cost of food is outrageous, and the cost of living is out of this world. Tell me what part of the country you're talking about or what scope you're looking at!
3
Booming Jobs and Low Inflation! Where did this survey take place at and where did you get these numbers! Clearly, this is not a comprehensive statement. Come into my territory and it's still 2008! I'm going to be 63 this summer, and this job market doesn't even respond to me, I've been put out, after working all my life, 45 years! These articles are only working with numbers that will present a positive headline. No, no, no, there are no booming jobs and low inflation. The cost of living is outrageous, just go food shopping and you will see!
2
Apparently you are not a student of Einstein Neil.
Besides numerous warning signs that the "boom" if you want to call it that is a bubble waiting to burst you also neglected to talk about the key element re this issue, time.
It took app ten yrs. for the Great Depression and the great recession to happen after the initial bubble started. Many times a bad president will be re elected during a faux boom or even if not, the crash comes to the new president who had nothing to do with it.
1
Not sure if anyone had spoken with people who live in the real world but gas prices climbing, health insurance increases outpacing wage increases and food prices are in rise. Food prices increasing while companies decrease amount of food - look at sugar - used to buy. Five puns bag now less . Reported need to dig a bit deeper.
1
Just to quickly varnish my earlier comment:
In April, 2019, per the DOL:
About 156,645,000 people were employed earning approximately $955.29 per week compared to 155,216,000 earning about $928.05 per week in, in April 2018.
Thus, for April 2019, on a yearly basis, total wages paid were about:
[52 weeks x $955.29 x 156,645,000 = $7.78135 trillion]
and for April 2018:
[52 weeks x $928.05 x 155,216,000 = $7.49051 trillion]
Thus, by this "back-of-the-envelope" estimate: total wages paid grew by about +3.9% from April 2018 to April 2019; while the CPI grew by about 1.9% for this same period.
[5/6/2019 M 11:30 am Greenville NC]
2
It would be great if this article also addressed the amount of debt, both in this country, and internationally. Im 2006, it was, let the good time flow, I wonder if we are heading back in that direction.
3
I think some of this has to do with the pricing power of corporations and their increasing willingness to use it. Some use it to increase profits at the expense of customers and workers, but they can also use it to keep prices steady in the face of tight markets for labor and for product. Monopolistic markets do not follow the "laws" of supply and demand.
2
Keynesian rules of thumb were debunked decades ago.
(1) Full employment does not cause inflation. Inflation is primarily an monetary phenomenon of increasing numbers of dollars chasing the goods and services we produce.
The US had effective full employment for most of its first century and a slight deflation because the number of dollars were limited by a gold standard.
During the Reagan recovery, unemployment and inflation fell because the Fed was limiting the number of dollars in circulation.
(2) Higher government spending depresses rather than stimulates economic growth.
The Hoover, Roosevelt and Obama massive increases in government spending were followed by economic depressions.
The Harding and Truman slashing of government spending were followed by economic booms.
(3) Using these same examples, we can also note higher and more progressively punitive tax rates reduce economic growth, While Harding/Coolidge, Truman, Kennedy/Johnson, Reagan, Bush and now Trump showed broadening and flattening the tax code increases economic growth.
Time to put Keyensian progressive economics on the ash heap of history.
2
@Bart DePalma You are saying the economic collapses happened after the Democratic administrations and not before? Think again.
1
Only impossible to those that can't think outside their bias. Automation puts a cap on mostly unskilled labor, and business has learned that just raising wages destroys business. Things change using experience from long ago leads to errors.
1
"...continuation of a trend..."
Nope.
In 2016, 30% of all jobs created were part-time jobs.
In 2018, not only were 100% of the jobs created full-time jobs but the economy also escalated 700,000 part-time jobs that were created during the Obama administration to full-time.
That's 130% of all new jobs were full-time. This is a big story.
You can see this powerful effect in real disposable personal income which increased $597 billion in 2018 after only increasing $244 billion in 2016.
When, you want to predict the future, it helps to start by predicting the past. The MEG and OLEG econometric models, the Penn Warton Model, the Moody's model all use severey flawed elasticity numbers in determining the economies response to tax cuts.
You can see this most powerfully in comparing the U.S. growth of $680 billion with that of Europe's $210 billion.
None of these models can explain that difference.
Our collective welfare is held hostage by intellectual corruption.
3
Anyone who doubts that this is President Trump’s economic boom will see the truth when the economy crashes and enters a long and deep depression should any Democrat succeed in stealing the 2020 election
5
So much for the old "New Normal". I like the new and improved "Newest Normal".
3
"And despite this ultralow unemployment rate, inflation is only 1.6 percent over the last year,"....The definition of inflation is too many dollars chasing too few goods. If inflation is low it means there are too many goods and not enough dollars. So while the unemployment numbers are great, the take home pay in dollars must not be very good. And there are problems in fly-over country. Thanks in no small part to the China tariffs the price of grain is in the dumpster. Corn at the elevator today is $3.45 a bushel. Ten years ago the price corrected for inflation was 5.02 a bushel. The break even price for a farmer on the very best farm land is $3.23, which means a lot of farmers are going to go broke this year. And then there is the budget deficit. Thanks to the Trump tax cut, 85% which went to corporations, the deficit under Trump has nearly doubled in 3 years to an annual $ trillion dollars. You can't keep doing that. The reckoning is coming; either taxes go up or government spending (Social Security, Medicare, etc.) gets slashed. Enjoy the ride.
2
Economics is not hard science. It's real name is Political Economy, a social science. And, even among the social sciences, it is the least useful in predicting anything. Actually, a random guess about some number: inflation, wages, growth rates, exchange rates, etc., is typically as accurate as an economist's calculation. That is to say, not very. Strangely, the Laffer curve, which is utter nonsense from any perspective, is now US government economic policy and will probably be credited with today's good news.
3
Democrats should reread their posts. Hate, envy, and delusion are ugly things
9
@Larry - Oh, they probably knew that from reading all the anger directed, by Republicans, at the previous incumbent during years of a recovering economy and declining unemployment.
5
@b fagan. Obama gave us the slowest and worst economic “recovery” in history.
1
@Larry - and he inherited the worst recession since the Great Depression, presided over six years of recovery (getting re-elected in the process), and there was a better 4-quarter performance of real GDP growth during the 2014-15 time than anything seen in the last two years.
So what's your point?
1
Too bad it doesn’t pay to whine about how somebody who works harder and is smarter or more talented is making more money or has something someone else doesn’t have
6
3.2% is no raise - it's just pennies to the IRS. chumps, you believe this drivel?
3
The jobs being created are mostly unskilled...construction, mining, truck driving, manufacturing ---jobs that require no education.While it's great that people can pay their bills, these kinds of jobs do nothing to make the US a player in the larger technology-based world. Those jobs are being done by people in China, India, South Korea, many of whom went to college in the US and then returned to their home countries. The current anti-intellectualism in this country will eventually be its biggest downfall. The day of reckoning is here.
4
@Pam
As a scientist, I appreciate built heritage, bullion, and delivered manufactured goods.
1
Oh puleeze!
" ... construction, mining, truck driving, manufacturing ---jobs that require no education." Don't forget welders, electricians, heavy crane operators, water treatment plant-workers, etc.
These people are all smarter (and wiser!) than the "educated" BA degree-ed people you refer to. And they certainly contribute more to the U.S. economy. P
1
This economy is the equivalent of eating our seed corn while top 1% sell theirs for gold.
3
These figures are all rigged to please the rig-master trump. Actually "the riggiest rigging" ever imagined by trump the master of superlitives.
1
The many commenters who report experiences at odds with this article are not wrong. "I suppose this is anecdotal, but if inflation is so low, why am I paying so much more now than two years ago for grocery items across the board from bread to beef to bacon to beer?" Indeed.
It is clear that current government statistics do not accurately reflect the experience of ordinary people. It is time to look at what those statistics measure and how they correspond to real life.
7
This is a weird analysis, if it IS an analysis. How many people are working two, even three, jobs? Why are so many people homeless -- and more being evicted every day? Why are so many children in the U. S. still living in families below the poverty line? 26% and more in some states. 20%, I believe, in my state of Ohio. Why are so many families just one health crisis away from going bankrupt? Why does the top one percent of families have as much wealth as the rest of us put together? (If I have those numbers right.) Why do so many homes on my "middle-class" street in Cincinnati look so dowdy -- and in need of repairs they can't afford? Why are our streets full of potholes?
5
@Martha Stephens
I suspect that the answers to many of your questions are related to the decisions of individuals to purchase goods and services that counteract their basic needs for food and shelter. Another answer is the decision to bear children without a clear plan to provide for their sustenance and shelter through 18 years.
1
@Martha Stephens. Home maintenance is now the responsibility of the federal government??
1
@Larry
@Martha Stephens said no such thing.
Let me make it simple for you - if we're all in such good shape, employment and wage-wise, why are so many having to work more than one job to make ends meet, not able to afford housing (different than being able to buy a home) still being evicted, still living below the poverty line, still unable to save for a possible health crisis.
Martha's point is probably still too complex for you to comprehend that she made no mention at all about government.
1
If professional economists want to understand the economy, they need to stop assuming that anything that is good for their employer is good for the worker/consumers that actually drive the economy.
Most economists work for corporations and they make far too many assumptions based on their relationship with their employers.
2
@McGloin
Do you really expect Larry Kudlow, Robert Samuelson, Stephen Moore, et. al. to admit that they're wrong about that assumption? It isn't just money- their egos are at stake!
@DC Reade. How did you leave Krugman off that list? Krugman has been consistently wrong for years!
4
@Larry
I left Paul Krugman off of the list because my previous post was a response to the observations made by McGloin.
For all of Krugman's faults and bad calls, at least he hasn't performed as a Panglossian shill running interference for Greedheads convinced that Plutocratic Autocracy is a such a wonderful way to organize a society that anyone opposed to having a maximum of power concentrated in the hands of the wealthy must be an Evil Collectivist Socialist.
I think Krugman should have realized that the fundamentals of the economic recovery achieved in the Obama years were strong enough that more than two years would be required to undercut them, and that the GOP/Trumponomics instant gratification policies of tax cuts combined with increased Federal spending (much of it on the weapons industry) were bound to produce an initial boost that would likely continue up to Election Day 2020- and after that, who cares? Because that's how the Republicans roll. If they can maintain or increase their political fortunes in 2020, no matter what happens after that, they'll have the power to craft a self-serving narrative that serves their agenda.
So yeah, Krugman let his loathing of Trump get in the way of a sober assessment. But at least he isn't a shill for a narcissistic Plutocratic Autocrat pursuing his own selfish interests, out to swindle trusting ordinary working people with flattery while skillfully concealing the fact that he thinks they're chumps.
1
Industry 4.0 and Digital Transformation will reduce employment. For now, there is good reason to hire people in the top sectors - agriculture, manufacturing and supply-chain. Why? The historic employment creation the U.S. economy is experiencing since the Obama initiatives kicked-in about 6 months after Trump's inauguration is "easy-come, easy-go". The main industries - agribusiness, manufacturing and supply-chain are the major job creators in the Trump tax reform and 'heads we win, tails you lose' trade wars with China. These three industries also happen to be the most susceptible to Industry 4. Digital Transformation: the jobs created will be 'seasonally adjusted' as we continue a path of automation that will reduce jobs in agriculture, manufacturing and supply-chains. It happened before. Henry Ford introduced manpower automation to improve production volume and quality 100 years ago. Farm laborers were terminated when gas-powered mechanical equipment performed the tasks to seed, tender and harvest crops, formerly done by manpower not 'horse-powered' equipment; and supply-chains will see one of the greatest leaps in Digital Transformation refining inter-modal connections between automated transportation systems, again, mostly driven by man-powered vehicles, boats and trains.
The learning of mid-20th century economics, as with all economic history, is: what goes-up, eventually comes down. The economic gravity in play in the Trump honeymoon will eventually reverse.
1
There is already enough complacency, without encouraging more. Inflationary pressures are building - wild speculation and personal behavior such as "using other peoples money" and the college admissions scandal have become the rule rather than the exception. All four lanes of I-280 traffic moving along at 90 mph on a 65 mph highway with no police presence is somewhat less than reassuring. The over-priced IPO's of Lyft and Uber, two companies without profits or substantial assets, might be all the evidence some need to avoid financial disaster... Coupled with personal over-leverage by large numbers of people, margin-call nightmares that spin entirely out of control are likely to start occurring, although probably not soon enough to teach what should have been learned last time! At least, we will all be super-wealthy... right?... right?
2
The answer to the downward spiral and the light at the end of the tunnel for most Americans is to pass a wealth tax on the top one per cent. Those who say it can’t work or is a bad idea should consider that we already have a wealth tax called the Property Tax.|
3
@John Shelley. How about the bottom 50%-who pay nothing or even less than nothing in taxes- start paying their fair share?
6
You mean Trump was stupid enough to follow the Bush-Rubin-Paulson-Geithner advice. And start a recession in Jan 2017, from the moment he took office?
You mean he demonstrated a political flexibility (that Romney and Jeb Bush were incapable of) to keep the brilliant economic work of Barrack Obama in place, after he was elected? After the complete repudiation of Hillary and the "Deep-state" economic establishment?
Maybe the Donald isn't as stupid as he portrays himself to be.
1
What a load! Not supposed to happen . . . Every decent economist I know predicted that the economy would boom (how could it not with a $1 trillion infusion of money) and then it would do what they usually do: falter and go into recession. When and how that happens is much harder to predict. THAT IT will happen is as absolutely certain as the business cycle that rises and falls.
3
@B. Rothman. Barack Obama promised us that slow growth was the new normal. Obama swore that if he couldn’t make the economy grow faster no one could. It was impossible! Add on Krugman’s promises that the economy would tank and never recover after President Trump’s stunning landslide and the Trump boom was never supposed to happen
6
I have three close relatives (son, DIL, SIL) with 5 degrees between them who have been out of work for a combined 30 months...
Please don’t tell me the economy is booming and there is low inflation...I am retired and have seen my medical costs go up, my property taxes go up, my fresh food costs go up, and my blood pressure...
5
The articles of the booming economy remind me of a political cartoon that ran years ago. There are a bunch of politicians and business men sitting around at table bragging about all the jobs added to the economy and the overworked waitress serving them is thinking "yeah, and I have 3 of them".
The way we keep statistics about employment and unemployment were set up in the 1940's with full-time workers being the norm. It is time to rethink and redesign the system.
5
I am astounded that not only the New York Times but all the media channels and newscasters I have watched since the report came out on Friday and all the guests on all the news shows not one person has dealt with the fact that climate change makes all these numbers meaningless. Climate change will cruelly alter the whole nature of how we live and it will cost tens of trillions of dollars more because Trump and the GOP have decided that oil and coal, undrinkable water and unbreathable air and more Deep Horizon disasters are okay. Why is no one arguing for saving the planet from this fixation on today's "numbers?"
3
Lots of jobs if you want to work at McDonalds or Walmart. Salaries haven't gone up in twenty years either and they let older workers go at the drop of a hat. Please stop telling us how great everything is. It's not.
5
So sick of the glossing over of the realities of workers' lives today. Spotty gig economy work and $11/hr. jobs with no benefits do not a good life make. Stop with the lies. The American dream was stolen from people in 2008 and it was never returned to us.
I have a Master's degree and I have spent the last 10 years barely surviving and getting pushed out of every decent place to live in the country. I found an apartment I could just barely afford five years ago, but rent in my area has doubled since I moved in. I am hanging on by a thread.
The American dream is finished.
7
One of the things economic analysts tend to overlook is the negative "wealth effect" that comes from the millions of middle class families who lost tremendous amounts of money during "The Great Depression II." Those who raided their 401k accounts to save a home from foreclosure, only to face that foreclosure a year later, will never be made whole again. Those who sold stock portfolios at a loss, and then stood fearfully on the sidelines as stocks recovered, will see their post retirement living standard greatly reduced. Their children may now be saddled with student loans because the money that was earmarked for their tuition will now be needed to sustain mom and dad in their old age.
These economic calamities don't get figured into economic prosperity statistics, but they will continue to exert tremendous influence over a wide range of economic activity.
5
@Indrid Cold. Since President Trump has pushed the SP500 to all time highs all money lost in 2008 has been made up, and more. Those who foolishly sold into a bear market learned an expensive lesson
2
The govt deficit/debt along with personal and corporate debts are booming faster than the economy. This is a Keynesian push that is not sustainable when the bills will come due and a recession occurs.
The low inflation rates are due to companies not having pricing power while trying continually grab market share coupled, for now, with cheap energy. Add in the effect of lower salaries and forced non-compete clauses for employment, inflation will remain low with continued expanding debt.
As the boomer generation continues to retire, the fall of tax revenue coupled with shifting demographics and a lower paid work force, future economic issues will manifest. Unfortunately, the lack of any long term preparation will overly burden future generations...and they will be mad.
3
The CPI used to measure inflation is flawed. For one it only samples some consumer goods purchases, not all. It selects only certain items to track. Secondly it is modified to allow for substitution, i.e., it assumes that consumers will just switch to cheaper priced goods when the item they regularly purchase goes up in price. That skews the index to be lower than it should be. Anyone who is a regular purchaser of goods knows that inflation is always much higher than the CPI numbers claim. Reality tells me that the 1.6% rate reported in the article seems way off.
Secondly one has to factor in how many people work multiple jobs because they cannot find a single job to support their family.
Finally, a real measure of how good the economy is under Trump should factor in how people feel about it. You would need to survey them to find if they think the economy is now better under Trump and specifically what facts in their life support their belief. This column is a good example of how statistics can be twisted to mean anything you want them to mean.
3
Its good times, people. Come out of the vineyard of sour grapes and enjoy. Yes, some standards have been relaxed, such as environmental standards. But the old standards usually specified the use of "best available technology". Best technology often did not mean most cost beneficial technology, or reliable technology. We live in a real world. Capital deployed to achieve improvements detectable only by sensitive instruments, but with no real world impact, is capital misdirected. Particularly when other nations are permitted to emit many times the contaminant at issue.
Rising tides raise all ships. In my extended family, there are some people who made mistakes in life, and did time in prison. At their core, they are good people. For the first time, they have been given the opportunity to participate in the job market based on what they can do, rather than excluded because of what they once did. And believe me, that is a good thing.
8
In other words, economists don't understand anything. The entire subject is without content applicable to the real economy (despite a great deal of theory and sophisticated mathematics). This applies to economists of all stripes.
3
Wasn’t Irwin the Times analyst who did that nice piece on what starting in low wage jobs at Kodak in Rochester circa 1970 afforded two women? One, who was a janitor at the start, went to college at night and became an executive at Kodak and the other, who didn’t attend college, was an Executive Secretary after some years. Both earned far more than poverty wages of course, and had pensions and paid vacation.
He nicely contrasted their history with the current “career” of a cleaner employed by a subcontractor with the contract to clean the Apple HQ in Silicon Valley. She makes $15 per hour and has no way of advancement.
Sad that he pretends this change doesn’t exist, even though he documented it within the last 18 months.
Submitted May 4th 8:34 PM Eastern
6
Isn't it amazing what free enterprise can do when you kick out the Democrats who've had their boots on its neck for eight years?
8
@Micoz
It is also amazing how Republicans forget the Bush recession which was losing over 500,000 jobs a month when he left office and the ballooning deficit under every GOP administration for the last 40 years.
This is just a Keynesian boost that pushes the problems downstream...when deficits are increasing with less than 4% unemployment, something is very wrong.
1
There has to be something said here about how the initiatives Barack Obama initiated after he took over for the Bush/Cheney White House debalce got our economy back on soild ground.
Bush was responsible for a gross-loss of jobs after his eight years, 500,000 jobs lost. His eight years resulted in our losing jobs. Losing jobs, people. Obama created jobs, 13 million of them. That's six zeroes-get it? 13 million jobs created with none of them being government jobs.
And where do you ever hear how Obama was responsible for saving the integrity of our Detroit-based auto industry? Many Wall-Streeters were calling for the elimination of one of the big-three auto makers, specifically Chrysler motors.
And I believe what Obama did almost deserves his birthday becoming a National Holiday. Maybe even Sainthood.
5
@merc
No doubt the GW Bush administration was a disaster for both labor and investors. There were never any gains for either, and the culmination of his "leadership" had the entire world on the path to a depression as the world's financial systems went into paralysis.
And I credit the Obama administration with the avoidance of a Great Depression. The inability to refinance debt during a period when financial markets were in paralysis required bold government intervention.
But many of the "jobs added" during the early days of the Obama administration were people getting their jobs back that were lost in the last months of the Bush administration. They were not the equivalent of jobs being added today.
I am glad that I gritted my teeth and held on to my IRA investments during the dark days of 2008-09. When the Dow fell to near 6500 in March 2009, some people I know panicked and sold out. And then were afraid to get back into the market. Their retirements have been permanently impaired. Thank you, George W Bush. Thanks for nothing.
3
@RM
You apparently don't understand something.
Obama's getting back those 'lost jobs' was one of the key building blocks of what we have today. Just imagine what Obama's true numbers would have been if he hadn't had to get back what was lost, and by attrition, getting to add the job growth we see today. Open up your neural pathways and redefine what you're imagining.
You need to re-think Obama's 'what could have been' if he'd been handed a scenario like he passed on to the turnip Trump.
1
@merc- hold that thought until Horowitz starts asking questions like Loretta Lynch’s role in changing Comeys original drafting of the findings of gross negligence to carelessness. Why he and McCabe sat on Huma’s laptop email until 8 days before the election and why the Ambassador to the UN asked to have 90 some names unmasked related to Trumps FISA warrent and finally why Susan Rice sent an email to herself 10 days after the meeting and 15 minutes after Trump was sworn in that Obama told Comey and others to do the investigation by the book. Why would there be a doubt. Unlike the Steele dossier these events actually happened. Obama won’t go to jail but his presidency will be stained
2
Can we really believe data coming out of this admin? Too many unethical, politically motivated folks.
3
@MidWest- the last time the Bureau of Labor Statistics updated their approach to determining unemployment was under Obama. If you were unemployed for over a year you were no longer considered part of the work force. That is why work force participation and unemployment both dropped
2
No mention of the labor participation rate or the deficit ?
Funny, because as the unemployment rate went from 9% and rising to 5% and falling under President Barack Obama, the Times refused to give him credit, instead insisting that the labor participation rate was the "real" rate
Funny how the standards have changed
Here's Neil in 2015, in an article entitled "The New Jobs Numbers Are Weaker Than They Look"
"To be clear, 2.94 million jobs is nothing to sneeze at, and it was inevitable that as the nation got closer to full employment the rate of job creation would taper off, but it is surprising that it is happening while the labor force participation rate is still relatively low."
https://www.nytimes.com/2015/07/03/upshot/the-new-jobs-numbers-are-weaker-than-they-look.html
Neil's been doing this for YEARS - anyone who's followed him since the Obama days is on to his ruse ...
3
Gee! Give a guy a couple of pay raises because cheaper workers aren’t available and he works harder. Who knew?
3
Good article. Most of the left is still curled up into a ball wondering how Trump bested them yet again. The left's policies are so bad Trump looks like super intelligent guy in comparison. All the left can do is offer more free stuff and hurt America in the process.
6
@Frank Griffin
Job growth was higher and inflation lower under Obama
"Bested" is a bizarre term given the facts ...
1
@Marion Grace Merriweather
Obama has the worst economic record of any president in history. He’s the only president in history with zero years of GDP growth above 3%
1
President Trump’s economy is the envy of the world!
5
President Trump has a better economic record than Obama and Krugman-combined!
5
I'm mystified as to why, if the economy is booming, the suicide and drug fatality rate are still so high across much of the country. Can it be that economists are measuring the wrong thing?
After all, this is the group that brought us GDP, a metric which rises with mindless consumption and environmental destruction.
4
It's actually the economy that has been happening since 2010.
2
The surging economy should be front paged news.
Dont tell us this is a continuation of the Obama era. Obama had a final year GDP of 1.9 percent. He told us it's the "new normal". Wages were stagnant. He was a globalist and we , the middle class, were told to be happy third world wages were rising.
So much for the Trump tax cuts being a "sugar high". Trump clearly knows what he is doing. His nationalistic outlook has put the USA in a strong position for years to come.
Go ahead and keep talking about his sour personality. We dont care.
Trump 2020 and I've never voted Republican. I am now.
5
Inflation at 1.6%, below the 2% level the Fed aims for.
When the law passed by Congress says they should be aiming for an inflation rate of ZERO.
The governing board of the Fed should all be fired and replaced with people willing to follow the law.
1
We desperately need all possible explanations why it's cannot be Trump's achievement. We cannot allow any positive Trump's influence on the vulnerable voters.
2
What is important is that the report shows that the lowest wages grew fastest, at 6% annually.
They would grow much faster, but for the fact that, while during the last quarter 360,000 new jobs were created, about the same number of people crossed the southern border illegally, competing for those jobs.
2
@Eric Portland
What you are saying is not true. Have you talked to anyone over 50 looking for work, with an up to date resume , college degrees and plenty of experience. If not, give it a try.
4
Why isnt inflation rising if wages are rising? Wages have lagged behind inflation for the past 25 years, so there is a lot of "wiggle" room. The people who buy goods, those with money, have plenty of it to spend, and they are supporting the people who live paycheck to paycheck. Basically, wage slavery. One reason wages have not risen as fast as they should? Illegal immigration and temporary employment, J1, H1B1 etc. The Fed should raise rates as high as they can to prepare for the next recession, which is coming it is a matter of when.
1
Is this the same unemployment rate that counts temporary and seasonal jobs as full time employment?
What's the percentage of part time positions included among the newly created jobs?
And then there are the newly created jobs that don't afford individuals the basic necessities to survive without a supplemental government benefit (see food stamps).
So all this bravado about a fictitious unemployment rate (btw are fictitious employees also counted with this number?) and the American people are suppose to accept this as a given?
And we are to accept one of the biggest omissions in this article about the fact that the Federal Government is using a "credit card" to pay for all this? A credit card that puts this nation in unprecedented debt- a bill that will come due someday. We will of course not start to hear of any discussion of such a deficit until the end of Mr. Trump's second term.
To the writer of this article, your not insulting every reader's intelligence with an analysis that fails to take into account significant facts. It's understandable that such facts would be omitted- there wouldn't be anything to write about otherwise in terms of whether Americans are misinterpreting the economic outlook for the near future.
Mr. Trump campaigned about a fictitious unemployment rate. He was right. It still is.
1
We are now at the point where a booming economy means accelerating climate change, and an apocolyptic "mad max" future for our grandchildren. Boom on o great god economy.
The future is a small price to pay for more money and more poison food, and useless stuff. After all, if something does not bring you "joy", throw it out. Ditto people.
3
Interesting the spinning to these good news by the Obama crowd. I’m not Economist but if I remember correctly, the actual “saving “ of the 2008 financial catastrophe was GW Bush, who had to inject like 700billions into the economy to avoid collapse. Obama came in with that cushion and built on that injecting a trillion more that then went to bad investments like Solyndra.
The economics headlines under Obama were always bad, unemployment, jobs, etc.those wont come back they told us.
What’s more interesting is that no liberal admits that the 2008 disaster was a direct consequence of Clinton’s policies in the 1990s, (subprime loans?) which just like the procrastination on terrorism by ignoring the threat of OBL /AQ, culminated both during Bush’s admin. If I blame Bush for anything was for allowing those financial policies to continue, but again he ran as a “compassionate conservative” which may explain why he agreed with Clinton on making it easy for poor people to “afford” McMansions.
4
So President Trump does nearly everything exactly opposite of the previous administration yet they somehow want to take credit! This is the President Trump economy. With entrenched republicans and democrats and the incompetent press fighting and stalling and criticizing nearly everything he has done; he, and America, just keep winning.
4
@C C Daniels
He very clearly deserves re-election. I will not vote for socialist Democrat who would destroy our chances to thrive.
1
@C C Daniels Look around you. Homeless camps, GM plant shutdowns (for entry-level sedans that workers just starting out can't afford!) Shuttered storefronts and marginally supported public services. People working 2-3 jobs so they can live paycheck to paycheck. This is the President Trump economy. Something is wrong when the government puts out statistics and the average American looks around at their community and cannot see the prosperity that the the government is touting. Another con game from the Con Artist in the White House. Bleeding Americans dry while he and his cronies laugh all the way to the bank.
1
@Freedom. The homeless camps I see are in far left Los Angeles, far left San Francisco and far left Seattle
It is painful to see the NY Times being a part of the Trump/Republican/Conservative/Evangelical Axis' spin machine. The reality on the ground is very different because you cannot spin reality, but they know that obfuscating, especially in the NY Times, will cause people to question their reality. The economy is not awful, but it certainly is not as good as this article claims. For the majority of people who are not the 1% or part of the T/R/C/E Axis' cohort. Everyone else should watch out for the fallout when the truth is discovered once Trump and his team leave the scene, just like his Taj Mahal in Atlantic City.
3
Believe the jobs reports and other economic reports at your own risk.
With the administration's lies now numbering over 10,000 and countless sycophants bowing to the "hopes" of their boss, do you really think that numbers are not massaged by the time they reach the press. Dream on.
2
Figures don't lie, liars figure. The first lesson I learned in Statistics 101.
Yes, there are jobs. Yes, some prices in some areas are rising within reason. Yes, wages have increased. But it isn't enough.
Day to day living for too many workers simply isn't sustainable. A $16.50 per hour job (full time if you can find it) cannot support the worker. It cannot cover housing, food, transportation, health insurance and, for so many, student loans. Forget about saving for a home. Or supporting your child. (child care? sweet lord, there's a major cost!) Google Rep. Katie Porter (D-CA) grilling Jamie Dimon from JP Morgan Chase. It's brilliant.
How many Americans are able to "Get ahead"? It isn't enough to work to afford the basics, every working American should be able to work and enjoy the benefits of a job, job security, paid health insurance, reasonable housing and food costs. The ability to "Save for a rainy day". Less debt, and, more importantly, less need to finance an expense.
It's time for a new method of evaluating the economy, and how workers are doing.
3
What if -- just spit balling here -- immigration policy really does affect the labor market?
While I do not support President Trump's often racist and xenophobic immigration policies and rhetoric, I also am aghast that putatively smart people refuse to acknowledge that the Clinton, Bush II, and Obama immigration policies were designed to help the top 10%, everyone else be dammed. While some lucky Americans were benefitting from cheap au pairs, camp counselors and gardeners, and businesses and institutions won the lottery with H1b teachers and tech workers and professors -- not to mention those workers' college educated spouses willing to work for cheap -- other Americans suffered through low wage growth and underemployment. The lack of honesty in our immigration policy has been particularly harmful to older workers and to young unskilled workers. None of this is new "21st century economics". It's just plain-old supply and demand.
4
I was struck by the statement , "1.9 million Americans would not be working who are instead gainfully employed." One definition of "gainfully" is "in a way that serves to increase wealth or resources."
i question how many of these 1.9 million Americans are really "gainfully" employed. I think their employment, in many cases, is merely staving off a more pronounced descent into poverty.
3
Unexpectedly the economy is booming after regulator roll back and tax reductions. Except that this has been done before JFK and Regan both used the same policy mix to produce robust economic growth. Its sad the we have to relearn the lessons of history.
2
Have a hard time buying low inflation. Pay is low for most of Americans. Housing, energy, health care, ins. and food goes up every month. Keeping food low and paying farmers with subsidies helps keep us out of the ugly situations of the past.
Sadly in a few years the GOP will tell us we're broke again and our safety nets must be cut to save them. Too bad those tax cuts didn't help the middle class and their programs. (SS and Medicare) Again just like Reagan, Trump gives away trillions to boost the economy. Knowing full well that tax revenues will shrink. Reagan had to raise taxes 9 times to offset his initial tax cut. Only the GOP thinks lowering taxes increases tax revenue. When the GOP started this 40 yrs ago it was if only we could lower the tax rate a few points. Now those few tax points yr after yr for 40 yrs has underfunded our country. All the money at the top. The top who get special tax rules, and evidently special rules of law.
1
While there were doubters as to the marginal benefit of a large, disproportionate tax cut this late into a record expansion, or that allowing businesses relief from regulations would yield some economic benefits, it’s accepted that those measures would have some short-term benefits. What is willfully disregarded by the champions of those policies is:
• Most predicted that the debt-fueled boost, would have a significant impact on inflation and interest rates. That we haven’t yet seen that, is more luck than a reflection of rational policy judgment.
• Regulations serve a purpose! Corporations would obviously welcome the opportunity to be guided by the honor system. The indiscriminate approach to cuts does not suggest strategically identified examples of overreach. The calculus is that resulting economic and health impact won’t be identified immediately.
• The last short-term assumption is that the improving job and wage picture will be a win. One lesson from 2016 was that solid unemployment, low inflation and consistent, albeit modest, growth wasn’t enough.
The driving issue was disparity of wealth and opportunity. By design, that has worsened under this administration. It won’t be long before the marginal gains felt by some will be seen in context with the massive benefits for those at the top, and the financial, health, and environmental bills come due from all of these short-sighted, unimaginative and backward-looking policies.
1
I have to trust the numbers, but none of this has impacted my personal daily life at all yet.
2
The puzzling and scary part of economic forecasts is the idea that science doesn't play much of a part in them. Also, so much is about stocks and how many of the average people have investments. Most are hanging on by a thread from month to month. So, I cannot give credit to anyone involved except who throws the nickel in the air. This article explains nothing that makes sense.
1
Really? Economists with their conservative bent, pursuing their retrospective war against the New Deal and the Great Society, warning that deficits lead to catastrophe - remember Rogoff and Reinhart - were wrong? That there might have been multiple paths out of the inflation of the 70s? Wow, it is almost as if the heterodox criticism of mainstream economics is entirely right. But the economists will, like scholastic philosophers after Galileo, keep debating in the old paradigm.
2
I can certainly understand why tax cuts, even if they mostly "comfort the comfortable", would goose the economy in some positive way. We'll see how well this effect persists. BUT, analysis of the "Trump bump" inevitably includes mention of deregulation. Is there really some measurable effect on Main Street, Wall Street, and international trade because of deregulation? Especially deregulation of the reckless sort pursued by the pirates now in charge of our health, safety, and environmental protection agencies? For instance: how does allowing methane emissions from natural gas wells benefit the economy anywhere but the oil patch? We know in fact that most if not all environmental protection regulations have positive economic impacts, because cost-benefit analyses (as required by law) must demonstrate it so. It's also been shown that compliance cost estimates most often turn out to be too high, because the affected industries figure out more cost-efficient ways to skin the cat.
As usual, short term financial gains are now winning out over long term societal benefit. This is so disheartening because Clean Air/Clean Water/etc. were such hard-won victories over such a long period of time.
As Ansel Adams said during the Reagan administration's assault on the environment: "they know cost of everything and the value of nothing".
3
@Mike Dyer
The quote is from the poet Oscar Wilde writing in "The Picture of Dorian Gray" in 1890 rather than the photographer Ansel Adams.
https://www.goodreads.com/quotes/77057-nowadays-people-know-the-price-of-everything-and-the-value
1
A thickly bespectacled Professor from the Future would often say : " Good News Everyone! "
Before immediately following with a statement that was anything but.
Yet as we all make hay whilst the Sun shines...most of us are increasingly (if not a little belatedly) realizing that whether these Happy Days upon us (as some would call it) are even ringing true for the majority of us ( they aren't) and will most likely be short , even numbered.
As, unless we change our ways and means much sooner rather than later, those numbered days will be upon us all and everything before we know it and before our last chicken is counted.
You can count on it.
But at least we will enjoy going out and down in style... The booming economy (or is it the Looming Economy before it falls upon itself in crisis...) will mean higher wages in a tight market where everybody has a job and at the very least , will enjoy wages growing at 2 , maybe even 5% a year as productivity rises in to placate the Corporations who always wants its cake and that cake and keep the cake you shouldn't even get ...so they also eat it/them/all.
Yes folks, everybody's a Winner!
For a moment...a very short moment...as that 3 or even 5% wage increase year on year will be challenged by that 10 or even 15% increase year on year that will occur in Health, Rent , Higher Education and all those things that are outside inflation's measure so as not be controlled by it.
Right now, in these" Boom Times" before the big Boom.
1
One important factor rarely mentioned is the importance of our new energy independence.
Previous economic booms were snuffed by OPEC rising prices. This cannot happen any more, and the continued growth confounds the economists.
The Green New Deal promises to reverse all this.
In a preview, Massachusetts failed to build sufficient natural gas pipelines to Pennsylvania. So last year, during the heavy blizzards, faced with the prospect of having the frail and old die of cold, like in Britain, Massachusetts had to import natural gas from Russia, with giant liquid natural gas ships anchored in the Boston harbor.
It sure didn't save the Earth. But it saved Putin's finances.
3
@novoad
the run of US "energy independence" in fossil fuels is not infinite. In a few years, when the last reserves of
gas are chased out of their underground pockets, the domestic natural gas boom will be over.
I realize that some people have high hopes for bitumen-grade oil cooked out from tar sands, but the reckless disregard of the long-term impacts of that extraction process is on par with heroin addicts disregard of injecting drugs contaminated with flesh-eating bacteria. Tar sands extraction is nowhere near the bargain that fracking is, and the adverse impacts on the environment are an order of magnitude greater. And then there's coal, more coal. Just as bad as tar sands and shale oil, or worse.
All of this reeks of the quack paradigm that maximizing quarterly profits fast up front can somehow buy a better environment up the road, after the consequences of unending pollution accumulate.
Fracking was one thing- in most geologies, the long-term impacts are minimal, and the adverse environmental impacts are relatively controllable as long as appropriate regulations are in place and enforced properly. Not so with strip mines for tar sands and coal. They're inherently sources of persisting surface water and groundwater pollution pollution, and most of that problem can't be remediated to any practical extent (spare me your PR showpieces.)
1
@DC Reade. Sorry, we’ve heard the gloom and doom story before and it didn’t pan out. In 1974, the US Geological Survey promised us the US had only a 10-year supply of natural gas left. The science was settled!
1
Mr. Irwin should read Ben Cassellman's column from a few days ago (https://www.nytimes.com/2019/05/02/business/economy/wage-growth-economy.html). The unemployment rate is a poor indicator of labor supply when there are plenty of non-working people in the working age bracket who are not looking for work. These folks are not considered unemployed in the statistics, yet they make up a substantial fraction of the people filling new jobs in the economy. Labor force participation rate may be a more important indicator. The Fed's predictions of higher unemployment may not have factored in how many people would "drop out" for a time.
3
The Monopoly Effect: There may be two reasons why low interest rates, low unemployment, higher wage growth, lower taxes and deregulation don’t correlate with increased inflation.
First, 10% of something is more than 50% of nothing. With more people working, tax revenues are breaking records.
The less obvious break on our economic throttle is the Monopoly Effect. The increased money supply goes through the economy, inevitably, ending up in the same place. Warren Buffet’s, Bill Gate’s, and Jeff Bezos’ and the others who own all of the property, from Baltic and Mediterranean Avenue to Board Walk and Park Place. As players (American workers and their families) roll the dice every day and pass go, receiving their financial stipend, and as the bank never runs out of money, the game goes on perpetually.
But what happens to all that money? Jeff Bezos is now worth $158 Billion. Buffet $89 Billion. Gates $101 Billion. They can’t possibly spend it all. Not only that, they each assume tremendous financial risk if they invest unwisely. So - much the money accumulates in T-bill accounts, or they give it away to various charitable groups in other countries.
In other words, the increased money supply travels through the American economy like so much Dulcolax. As Gates and Buffet and Bezos, and for that matter, as does everyone who begins saving again prospers, the money goes out of circulation by servicing past (i.e. enormous) debts almost as fast as its printed.
1
A very thoughtful and objective article. The economy left to it's own will keep growing as long as a bubble does not develop in the real economy or markets. This is what the FED should keep an eye out for. If a bubble forms in the stock market their answer in the past was to raise rates. That was a mistake then and it would be in the future. The FED has margin rates they can adjust should such a scenario necessitate. Greenspan should have done so when he first spoke of irrational exuberance.
3
I remember reading a book by Milton Freed (MIT economist) for my MBA program written in the 1990s about how with changes in the global economy the “inflation monster” was dead
In addition to these changes I give credit to both Trump and Obama, Trump for the changes to the tax code the repatriated Trillions of dollars in business profits for investment in America, that is what is creating the jobs and as long as those jobs are creating other jobs (fast food, real estate agents, construction labor) the expansion will continue. I credit Obama for his policy of taxes and regulations that created the pent up demand that when unleashed by Trump added another boost to the economy. Because four years ago sub 2.0% was the new normal
5
The corporate repatriations have gone to stock buybacks and dividends. There is no evidence multinationals are using any of that money to invest in America. In fact, many companies are keeping money offshore to spend on international expansion. They’re building new facilities and increasing hiring outside the US. The same thing happened when they had a short amnesty during the George W. Bush years. And money isn’t really outside the US. It’s often on deposit in a bank account in NYC. When they repatriate they’re just changing how they account for it in their financial records.
What did change under the Trump years is that Republicans in Congress finally ended the budget sequester, which was essentially an austerity program. They stopped worrying about deficits once Obama was gone. If Obama had the higher level of direct government spending and lower individual tax rates that Trump was provided, then growth would have been much higher. Ben Bernanke was literally begging for help from Republicans in Congress, but none was forthcoming, so he had to use three rounds of quantitative easing to stimulate growth. And Bernanke was a South Carolina Republican nominated by a Republican President!
6
@H- I can not speak authoritatively about what entities bought what stock but my recollection is the current market rally started the day after Trumps election and not the day the tax cuts went into effect. Second, yes the money was probably in a NY bank it still could not be spent in the US without paying US taxes. (Doing so is tax evasion, ask Paul Manafort) Also, the money is not being spent in high tax states like NY it is going into the low tax “Red” states like here in Ohio. The main indicator of that is the gains made in employment of the manufacturing sector.
3
When i read about the booming economy I wonder if I mlive in. A different universe. As someone with a doctoral degree in mental health, I can say that considering the cost of my education I earn less than before I had even a BA. We don’t get raises for any reason unless you’re in private practice and choose to raise your rates. Those of us working in the community mental health arena don’t get raises, don’t get any type of break of a financial nature. If the person is not seated in my chair, I do not get paid and if they are in the chair I would be embarrassed to say the rate I get. It’s all too lopsided there is always the need for us to be there to help but there is never talk about fairly paying us.
7
There's this little equation:
P = (MV)/S
where P is prices , M is the amount of money in the economy, V measures the frequency that money changes hands usefully, & S is the dollar amount of the amount of stuff, goods and services, we can produce in some time period.
This is not to be regarded as exact. It's more like a rule of thumb, but it can point you in the right direction. For example, it explains why inflation has been so low since 2008.
After 2008, the FED poured TRILLIONS into the banks to save the baking system. The banks could have used this money to make a loan of $10 for every buck they got from the FED. So M went up. Why didn't P go up?
There are 2 possible reasons. S went up or V went down. S did go up a bit, but V went way down. Banks were gun shy about making loans after what happened in 2008, so they only lent to the Rich who speculated with the money which explains the rise in the stock market.
The equation helps to explain how the MMT school of economics works. MMTer know a secret that mainstream economist don't seem to know. The federal gov (thru the FED) can create as much money as it needs out of thin air. So if it wants to spend a buck it doesn't need to tax or borrow to get that buck. But then M will increase by a buck. We might get excess inflation.
But the little equation tells us the way to avoid this without having to tax the money back, is to spend that buck in a way that increases S. Fortunately, the things we want to do will do this.
2
@Len Charlap- yes but that only works in the US because the American dollar is used as the basis for international trade. Printing more money devalues the holdings of foreign countries which means if we do it too much eventually other countries will dump the dollar and we will be Germany in the 1930s.
1
@Ima right - First of all I think you mean Germany in the 1920's. Its inflation problem was started by the allied sea blockade and continued since it did not have enough arable land to feed it s people. The was exacerbated by the reparations in kind by which the Weimar government had to send steel and cattle to France and the UK. Over 1,000,000 people starved to death, Then the government began to print excess money. All this had nothing to do with foreign holdings.
If the money in the US is used for domestic commerce by increasing S, this will NOT devalue it, That is my point which you seem to have missed. P will not rise too much.
You seem to believe P = M. One adds more money. You debase the currency. We turn into Weimar. What I was trying (unsuccessfully) o show you was that this is not the correct equation.
1
We need new metrics as its clear that most wealth is flowing towards very few. This is easy, just ask people how they're doing.
3
The boom in apples the author describes may be entirely real. As so many comments make clear, however, most folks live on oranges, and lately we've been getting lemons.
Wealth has three sources:
1) Virtuous behavior (diligence and frugality),
2) Luck (genes, upbringing, and lightning striking the other guy's barn) and
3) Non-virtuous behavior.
In a recent argument I was told that because cheating is so hard to prove (tossing needles INTO haystacks is far more efficient) we should throw up our hands and trust free enterprise to trickle down all the crumbs we deserve.
But even if NOBODY cheats, a fairly-played game of Monopoly ends with only one piece on the board, and having your piece removed in real life is not a Happy Meal.
The "libertarian" veins bulge from my temples when I hear terms like "fair share." I have no idea what is fair. An asteroid is fair if it hits us.
What is PRACTICAL is to develop a system of distribution that rewards effort, talent, trust funds, and lucky lightning, but sustains everyone else (and their planet) so they don't coalesce into an asteroid of pitchforks and torches. If libertarians don't invent this system, everyone else is going to invent it for them. That won't be good for libertarians, and it won't be all that great for everyone else.
Does Parker Brothers still exist? Maybe enlightened tycoons should team up with them and find a way to tweak Monopoly so it has a happy ending (i.e. none). It might even make the game more fun.
1
@Ben- well written, perhaps the should add an earthquake or astroid strike to the chance card. Remove boardwalk and Atlantic Avenue from the game board after so many turns due to rising sea levels due to Global Warming and apply progressive taxes to the richest and provide welfare to the poorest players.
1
Uh oh... they're starting to say "it's different this time." That's always a sign that things are about to start going wrong.
What's the change in the economy that would make a long-term boom reasonable? We're not having huge breakthroughs in how people live... breakthroughs on the level of electricity, not smartphones. Most people are living a lot like they were 10 years ago, even if they have upgraded or replaced a few things.
So why would the rules for the economy be different this time?
4
@Maria The economy lost over 10% in 2008, and then grew at an average of 2% for the next 9 years. The historical average from the end of WWII through 2007 was 3.5%. There has never been a recovery from 2008. Labor force participation remains 4 points below where it was in 2007. 2018 was the first year since 2005 where the economy grew at 3%. In other words, there is enormous slack still left in the economy after a lost decade.
By contrast, the double dip recession in 1980-82 was almost as bad in percentage terms as 2008-9. The difference is that from 1983-84 GDP grew at an average of 8% for a year and a half. It then grew at around 5% for the rest of the decade. Even then, inflation was not a serious problem.
The last decade has been the worst decade for the US economy since the Great Depression, across multiple core measures. It has only begun to recover in the last year. It has a long way to go to actually recover what was lost. If things had merely followed the historical average after 2007, US GDP would be 20-25% greater than it is now.
3
@Joe
Exactly, now the Feds need to raise the rates to get it back to a reasonable rate because we cant take on any more debt to juice a lagging economy and will have to be able to lower rates. We dodged a bullet in 2008 the next time we might not be able to
1
I’m sorry, but don’t they continually except certain classes of workers from the unemployment statistics. I know of a number of unemployed older workers who just are not hired for any job. No matter the college degree or level of experience.
9
Is it possible that the financial crisis was so severe that there is still considerable slack in the labor market ten years later?
That seems to be the most obvious explanation for the record expansion we’re in but I haven’t seen it discussed anywhere.
3
There’s a crisis of perception and acceptance.
Strangely, most liberals want to deny that the economy is doing well. They want to take their own metrics, like price of tomato going up, to justify their economic view.
Reality is Trump, despite his erratic leadership, has delivered a stable and growing economy. Definitely, at least, much better than what Obama would have delivered if he was still the president.
13
I haven’t seen much improvement. It’s been a slow drift upward under both Obama and Trump, primarily engineered by quantitative easing and loose monetary policy by the Federal Reserve and central banks across the globe. Republicans in Congress did finally agree to end budget austerity, which for years depressed economic growth. But their tax cuts for corporations and the wealthy haven’t passed through to the rest of the economy, even according to economists who believe US corporate tax rates should be lower. The tax cuts have also exploded deficits and will cause big problems in the future, particularly the ability to use fiscal stimulus when the next recession inevitably occurs.
There is an increasing number of job openings for retail, food service, home health aides, and other minimum wage work. But I honestly have not seen improvement in the labor market for college graduates in the NYC region. Anyone unemployed over 40 years old is automatically considered unskilled or out of date. Almost all jobs openings require 5-10 years of very specific prior experience, prestigious academic credentials, and a litany of other requirements. Then there are the one-way recorded video interviews and online assessments. Unless you have an inside connection, I don’t know how people find work. Which is probably why labor force participation remains depressed. It’s like the recession never ended. Who are these alleged employers proclaiming a tight labor market?
6
I don't think economists yet understand the POSITIVE impacts of the current trade war. Sure, there are some negatives to protectionism, but there are also positives, which is why protectionism even exists. The renegotiated trade agreements with Canada and Mexico have fixed long-outdated problems. And the trade war with China has forced investors to think about investing domestically rather than in foreign markets. These factors may be the biggest reason for the currently booming economy, and more attention needs to be given to them.
1
@LucasJohnson Trump is not trying to do much protectionism at all. He wants a fair playing field for most of it. Other nations have been robbing us blind with much higher tariff on us. Trump is fixing things.
1
What seems to have passed is the concept, one that encouraged stable family life, that a week's wages from a 40 hour week would enable a family to live modestly with reasonable health insurance, be debt free and send their children to school.
7
@tommag1 Here's another concept that has passed: living simply. In the 50's, that meant feeling you were living well if you resided in what would be, by today's standards, a very small house with one bathroom, no air conditioning, one small TV a tiny yard,bedrooms shared with siblings, and one phone without an answering machine. One living room - no "rec room" or family room in addition to a finished basement. Your wardrobe was small - am I the only one who remembers the tiny closets? If you ate out, it was rarely and at a diner or very simple family restaurant. Cruises, air flights and trips to Disney were for the rich; most people who could afford any sort of vacation went in the family car to a lake and stayed in roadside motels (not hotels) with a TV in a communal room. The kids that went to college shared small rooms with a couple of cheap metal desks; there was one choice of main course at meal time; and your "fitness center" was an outdoor field. Yes, it's a lot harder to live on that 40 hour-a-week wage today, but we're living much, much higher on the hog today, and that costs.
18
@Pat Sette
Exactly right and thanks for stating what should be obvious. Who knew that when universities evolved to include resort style amenities, college might become more expensive?
1
@Pat Sette
When I was a teenager no one had cars
and we walked through waist deep snow to buy drugs
1
Heartbreak at the times over trumps golden economy. I will say though, inflation is a real fear and it can happen FAST.
3
Employment at 3% but poverty at 12%. What’s wrong with that picture....??
9
@MamaBear Yep! As another commenter here pointed out, it's called serfdom.
1
Maybe instead of making economic prognostications based on hatred for Donald Trump and a fervor for socialism, if economists considered the impact of leaving more money in the hands of producers rather than partisan politicians and reducing regulatory drag, eggheads would have gotten it right.
13
@Dutybound- I am still waiting for an example of a socialist state that has not failed and Sweden does not count because no one there can afford to own a house or car and they have to settle for second rate furniture that can only be assembled with an Allen wrench
1
1) Inflation, or lack thereof, is much more a sum of global inputs than ever before. Globally, overcapacity and often overproduction exist for almost any commodity, mid-stream component, or finished product.
2) It's quite possible that many companies used all or part of their trump corporate tax cut windfall to finance product price cuts or avoid price hikes. If that's the case, the impact will dissipate.
3) Company HR managers have never seen a situation wherein there's real competition for workers. A good part of their bonuses is derived from how much they DON'T spend on labor. They've built an infrastructure of silly "non-compete" clauses and mandatory arbitration for all employee-related grievances. If trump succeeds in repealing the ACA, worker mobility will further suffer.
5
This looks like the Reaganomics formula to me- the instant gratification impacts on the economy from a tax cut that mostly benefits the wealthy, offset by borrowing to deepen the Federal debt and deficit. Neat history app https://www.treasurydirect.gov/NP/debt/current
The Reagan administration was the first to push the national debt over 1 trillion dollars. Now Trump is going to give us the first annual deficits over $1 trillion.
Another prominent component of Reaganomics was a steep increase in the defense budget. This has also been copied by Trump, who boosted the base Defense budget (i.e, not including "OCO" costs of our overseas adventures) from the $523 billion of Obama's last budget (Federal FY2017, ending 9/30/2017) to $600 billion in FY2018, and $616 billion in FY2019. In particular, the weapons acquisition/R&D budget has been increasing, from $112 billion & $72 billion R&D in FY2017 to $143 billion & $104 billion R&D proposed for FY2020. https://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2020/fy2020_Weapons.pdf (I tried to find similar figures for FY2019, but in that Defense.gov overview, they're buried. Also worth noting that part of the FY2020 weapons/R&D proposal is apparently filed under "OCO.")
That combines to $63 billion increased "stimulus" for the US weapons industry, in a single annual budget. And it probably accounts for a large chunk of the increased hires in the American manufacturing industry that's been so widely hailed recently.
4
@DC Reade
We increased debt by $10 Trillion under President Obama. We don’t have an income problem, we have a spending problem. Discretionary spending (including defense) doubles every 8 year and non discretionary spending (interest, entitlements) now comprise 55% of the total budget. If we don’t get spending under control our economy will suffer. Both sides are at fault.
That being said; I would prefer 3% growth to 1.8% with deficits similar to Obama’s.
4
@Bill. 70% of federal government spending is payments to individuals that are automatic, they aren’t even voted on by Congress. You can’t control Big Government spending without controlling its biggest component
3
@Bill
Your "$10 trillion" is an incorrect figure. You may not know how to calculate the national debt. A president's first budget dates from October 1 of the year he was inaugurated (2009, in Obama's case; FY2009) and is budgeted into September 30 for the first year of the next administration (2017, in the case at hand; FY2017.)
The total increase in debt FY2009-FY2017 was $8.7 trillion, not $10 trillion. That's more than a rounding error. fwiw, it also isn't a doubling of the debt under Obama, either.
The person who first doubled the debt was George W. Bush- from $5.8 trillion in FY2002 to $11.5 billion by the end of FY2009, an increase of $5.7 trillion.
The debt clock for 09/30/2009 actually reads $11.9 trillion, but I've subtracted the $350 billion half of the $700 billion Special Appropriation Bailout For The Worst Recession Since The 1930s that Obama requested to be released, because that half is technically his responsibility, even though it was Bush's recession, and it was Bush who arranged the bailout. (The tax relief, "payroll tax holiday", and funds of the 2009 stimulus package were an impact spread across several years; only a fraction of it was spent in FY2009.)
Obama's discretionary spending was very low. For years, he operated under "sequester" rules imposed by a GOP Congress that refused to pass his budgets. Those sequester limits no longer apply under Trump. That's how Trump gets to use the Defense Department as a stimulus cash cow.
6
There are a few economists that have been consistently correct in their predictions. Unfortunately, they represent a small minority of economists.
Wouldn't it be better to listen to economists that actually have a track record of correct predictions than to crackpot economists that have been consistently wrong over and over again? Thinking mostly of Paul Krugman here. Has he ever been right? On anything? Why is he even being printed anymore?
Oh, yes. The Nobel Prize win. Just like Obama. Krugman wrote about the economies of scale and the costs of transportation making the relocation of manufacturing away from major markets too expensive. That didn't work out either. But he got a prize - for being wrong.
8
Give credit to fracking for upending the conventional wisdom.
3
@Sebastian Cremmington
Yes; innovation from the private sector. Remember that when the big government pols come calling.
5
"Manufacturing employment changed little for the third month in a row (+4,000 in April). In the 12 months prior to February, the industry had added an average of 22,000 jobs per month." - April Jobs Report....
When reporting on annual addition of manufacturing jobs why use 3 months that assume 22,000 jobs per month instead of three months that had 4,000 jogs per month. Is AG Barr now summarizing the jobs report?
3
Just wait until the bill comes due, after this ginormous economic balloon propped up artificially with tax cut giveaways to the ones reaping virtually all of the benefits and the usurpation of regulations protecting life & limb & health and a livable planet bursts. No super fund, giga or terra-fund will be enough to clean up the mess - let alone the ability of another Democratic government to rescue us again.
3
@PAN
Yikes; lowest recovery in the history of our economy. An administration that said 1.8% GDP growth was the “new normal” and that manufacturing jobs were going away. Some champion.
5
@PAN The world is going to end in 12 years anyway, so who cares? And we will be out of oil in 1980. Or 1990. Definitely by 2000.
Prophets of doom are just not credible anymore. Sorry.
5
As my old econ prof in college used to opine: "If you laid ALL the economists in the world end-to-end, they STILL couldn't arrive at a consensus."
2
So, liberal economists, including the elf, warned that Trump would ruin the economy and instead it has improved. Not notably, mind you, but really just a continuation of the "Obama Economy". The upshot of all this -- by a liberal economist writing in the Times -- is that things must be different these days, because the predictions of those who said Trump would ruin the US economy did not turn out to be true and that Obama's economic policies continue to work their wonders.
I wonder if many reading this will take the time to think about Obama's economic policies and how they might be effecting things today. Obama spent about $1 trillion on a "stimulus" program that resulted in little or nothing. Many government "investments" in 2009 and 2010 were in things like Solyndra, which went bankrupt a few years later and the government lost half a billion. The other thing he did was to lower interest rates, which led to a lot of corporate borrowing, but the corporations hoarded their cash, because of worries that the economy was so stagnant that it made little sense to expand anything.
The constant refrain in the liberal press that today's economy must be the result of Obama's policies needs to be checked against what those policies actually were and whether there is really any likelihood they could be having an effect now.
Trump's economic policies are clear: lower taxes, deregulation, and improved trade agreements. Today's economy is a result of these policies.
12
@The Ancient Enough with Solyndra already! That was part of a larger program that funded a bunch of companies. Solyndra itself lost money, but the program as a whole did well.
It's the same as when you put out a bunch of research grants. A few will be duds, but you've got to look at the whole set.
2
@The Ancient Brilliantly said.
1
We truly live in an era of Orwellian doublespeak and outright fraud:
The U-3 number is the one posted in the news all the time. It is a simple percentage of people unemployed when taken from the total number of people "participating in the workforce"
The U6 number (the one economist, banks and the banking industry use) includes underemployed and those who have stopped looking for work due to all kinds of reason including no availability in their field/skill set.
The U6 Unemployment Number for March 2019 is 7.3%
It's outright fraud or incompetence to compare the U3 unemployment numbers of today with unemployment numbers from year past. The change in methodology in how the U3 number is counted in 2010 means that ANY comparison of unemployment between unemployment rates in now with any year prior to 2010 is just a meaningless exercise in storytelling. Furthermore, with a workforce participation rate of only 62%, the U-3 number is just a farce.
Take into account flat or minuscule increases in wages while sailing into a gale force wind of price increases in healthcare, rent, food, and education and these unemployment numbers mean little to nothing to the average American.
10
I could not have put this better myself.
1
The jobs number isn't that important by it's self. What jobs are growing and what jobs aren't is the real question. Flipping burgers does not equate to running a five axis milling machine or manufacturing building supplies, or building the web of the future, or rebuilding a decaying infrastructure. The US has already run short of skilled labor, and Trump's immigration policy exacerbates any chance of utilizing that needed for serious future capital growth. Add bogus inflation numbers and a government printing money at double speed the recipe for the next financial collapse is in the works. In today's global market tariffs are comical and Trump is the leading comedian. He doesn't understand how interlaced the worlds production machine has become. The US is in for a serious lesson in republican economics when the dollar is no longer considered a safe holding.
5
@Figaro The world is going to end in 12 years anyway, so who cares? And we will be out of oil in 1980. Or 1990. Definitely by 2000. Prophets of doom are just not credible anymore.
3
Thank you President Trump! It’s obvious you were correct when you theorized that there will be more work when people are allowed to keep the fruits of their labor instead of being forced to hand it over to Big Government so they can waste it. When there’s more work to be done, more people will be working. Keep up the great job!
12
Larry, please stop kidding yourself. Read the comments that came in after your euphoric sigh of relief. Two readers place this nonsensical article in the perspective of much higher actual unemployment numbers than the ones we read in the media, and produced by our government. Call those fake numbers, if you will. Hold on to your hat when the reality of the situation comes crashing down like two Boeing 737-MAX jets that were designed without regulatory oversight.
3
@Erik van Dort. @Erik van Dort. Your assertion that the 737 MAX was built without Big Government oversight is an outright lie. Aviation is a heavy regulated industry, every single aspect of the industry is strictly regulated, including when and where pilots eat! You are sadly mistaken if you think the only reason our lives aren’t perfect is lack of Big Government regulations.
1
@Erik van Dort. Your assertion that the 737 MAX was built without Big Government oversight is an outright lie. Aviation is a heavy regulated industry, every single aspect of the industry is strictly regulated, including when and where pilots eat! You are sadly mistaken if you think the only reason our lives aren’t perfect is lack of Big Government regulations.
1
People need to keep in mind that job growth is slower, GDP growth is the same, and real wage growth is much slower now than under obama. And obama achieved this while reducing the deficit by nearly 2/3rds (from 1.2 trillion to 428billion) while Trump has doubled the deficit he inheritied (back to 1 trillion). The best that can be said about Trump's economic performance is that he hasn't yet messed up the growth he inheritied, but has created a lot of future problems.
5
@memyselfandi There are very few people who still buy this nonsense, you three might be the only ones left.
BTW, Trump has yet to produce a $1 trillion deficit, so that part is just a lie.
2
@memyselfandi First Obama ran up a trillion dollar deficit by spending 50% more than anyone else ever has. Then spend 10% less the next year and brag about bringing down the deficit. After a great down turn there never was a bounce due to Obama's policies being so bad. We are lucky to have Trump and non Democrats in power.
1
@Frank Griffin Oh wow - you forgot we were in a major recession and maybe the government needed to stimulate the economy. But that's how the GOP rolls. Obstructionist deficit hawks until Trump saunters in, then open the deficit checkbook and spend like the checkbook doesn't need to have funds in it. On a wish and a prayer that tax revenues will roll in.
1
I think there are two things that are happening. First, the economic data showing a small work force is, in fact, wrong. I think there are a lot of people who were sitting on the sidelines who are now moving into the workforce because they can make more money then disability, various welfare programs, or the underground. Secondly, the bad effect of regulations was not appreciated. I am a long term Oil & Gas engineer and I saw a lot of projects that were cancelled and/or sent overseas the last decade. These projects are coming back.
And, of course, without the dead hand of the epa and doi on the O&G industry, production has flourished. We have, since Trump has been elected, gone form 8.8 mm bbls/day to 12.2 mm bbls/day. The same can be said for gas production. Combined, this is about $500 million/day that is now going into the US economy and not overseas.
I believe the economists models did not take this into consideration. MAGA, indeed
10
Mr. Irwin,
Please write again on this topic taking into account the falling labor force participation rate, which has declined 4.5 percentage points since April 2000. Economic policymakers need to be properly informed about whether the old relationships and rules of thumb no longer apply.
2
If we do a little mind game let's just say HRC was elected instead of DJT in 2016. She said she was going to continue Obama's policies and even tack further to the left....more regulation, more fiddling with the economy via the Fed, more leftwing slant on healthcare, green energy, etc. Does anyone really think that the economy would be anywhere near where we are now? Like Trump or not, when the boot of regulation is taken off the neck of American business and taxes are lowered for corporations and individuals (and yes, most individuals saw a tax reduction) the beauty of capitalism will flower as we have seen in the last two years.
9
Economists have failed to develop new guidelines that are based on the new structures that have formed in the economy in the past decade or two, such as the rapid and pervasive emergence of platform ecosystems, and the enormous impact they have had. (Just consider the differences between linear supply chains and non-linear ecosystems.)
There was nothing remotely like Amazon or Alibaba thirty years ago. There was no parallel to the global spread of smartphones and their app stores. And likewise, the impact of web and mobile advertising (by Google, Facebook, and others) on the media landscape has no precedent. None of these ecosystemic phenomena are included in the long-established and now outmoded economic models, like the Phillips Curve.
We'll have to have a new generation of economists asking a different set of questions if we are ever going to find those patterns and understand the new foundations from where they arise.
3
The reason why the economy is ramping up yet there is available workers is do to underemployment and technology.
- Many older Americans who were underemployed likely now can work full time. Some who were on the sidelines maybe came back into the workforce.
- Companies discovered 10 years ago they could do more with less, and smartphones and other technology such as scheduling software companies can squeeze units of maximum productivity out of every employee. Workers are much more productive than they were 20 years ago.
What I would like to see is how long term unemployed over 50 are faring, as one who is a 51 year old male is having a tough time getting ANY work despite solid references and good resume. Too many working 60 hour weeks or overtime when 40 hour weeks would open up jobs for more people.
6
@JMcCoy 3.6% unemployment, basically Full employment, not seen since the late 60's.
3
@JohnLeeHooker - the U6 rate is 7% - more accurate includes underemployed etc. U3 doesn't include unemployed not receiving unemployment benefits. Lots of age discriminated workers on the sidelines with Bachelor's willing to work. Only going to get worse soon 35 year olds will be too old.
1
@JMcCoy -- And the Democrats arent helping with their overt agesim as they discusss presidential candidates. I lost my benefits-eligible job at age 60 after 35 years with the same employer, and could not even get a job interview at the same organization despite mulitple applications. It was only until Trump was in office for a year that hiring was picking up everywhere, and I got a job at the old employer. It doesnt have benefits but it sure feels good to be working again. Now everyone in my Democrat-dominated community is mystified as to why sales tax revenues are up for the second year straight. I could point out the obvious, but they'd think I had sympathy for the devil.
2
there was a recently published article which discussed that the problem here is actually simple. the unemployment rate is not accurate. the labor participation fall off after 2008 made unemployment seem less than it was. it was probably about 3 times as high as described due to non counting of people who had dropped out of the labor force. right now the unemployment rate still is overstaying the degree of employment. the extra workers are coming from people returning to the labor force. if you look at labor force participation, we actually still have some ways to go before we reach typical levels of labor force participation. the Phillip's curve still holds, it just needs the proper data input.
2
@GH--
You have a citation or three to back up your assertion(s), of course?
I'm retired; I can wait.
1
@Zee Unfortunately, few posters know what we mean by a 'citation.' It's good enough to just spout some numbers.
1
I see lots of comments from people complaining about how everything is more expensive these days— from people in Seattle and other blue cities/states that never saw a tax they didn’t like. And those $15/hr minimum wage hikes? Consumers are paying for it, of course.
11
I think Fed chair Powell's wait, and gather additional evidence, is particularly apt in this situation. The braggadocio about April's DOL data de-emphasizes a decline of almost -645,000 individuals in the labor force, per the DOL's household survey. The recently much watched labor force participation rate actually declined from 63.0% in March to 62.8% in April. Per this household survey, there was actually a decline of -103,000 individuals in the number of people employed. So, much if not all, of the improvement in the unemployment rate for April can be attributed to this decline in the active labor force. And, often it is discouraged workers who opt out of the labor force.
Also, for the month of April, average hourly wages were up only +0.2% while average weekly hours worked actually declined from 34.5 in March to 34.4 in April. And, weekly average wages actually declined in April; from $956.00 in March to $955.29 in April. Part-time workers also increased significantly.
My point is that there is too much static in one month's data to base longer term policy decisions on. This one month's data suggests a continued very low growth economy with little fiscal or monetary stimulus available to fend off a surprising, untoward economic event.
[5/4 Sat 12:53pm Greenville NC]
4
@John Joseph Laffiteau MS in Econ -- And how do you know from the labor participation rate how many of those were actually "discouraged" and how many dropped out because they were retiring? The labor participation rate has actually been increasing since the Trump economy began. I am one data point in that. But keep looking for the grey lining in all that silver, Mr. MS in Econ. It's clear what you want to see.
5
An aging workforce would create these conditions regardless of policy and tax changes. When thousands leave employment monthly, those remaining should demand higher wages with fewer workers to take up the slack.
1
There is another unmentioned possibility . Unemployment rates during the prior decade were artificially minimized by no longer counting people who were no longer actively seeking employment. In other words, there were a lot more available workers than had previously been reported , so the assumption of worker scarcity was incorrect.
3
The critical element of several successful stimulating tax cuts has been the immediate write off of capital investments. That seems to both stir economic activity and productivity increases as the new equipment is generally more efficient and likely requires less maintenance. While people complain when business gets a tax break like this, it really does hold back inflation when workers become more productive with the new tools and it makes US companies more competitive globally and allows for better wages and benefits. Instead of going into the political corners debating who deserves credit, lets learn what works and what does not and then both parties can employ the tactics that actually prove beneficial.
3
@KW64 One should remember that businesses do not pay taxes, ever. They just collect taxes from their customers, who don't even realize that the increase in prices is actually tax monies going to the government.
An honest tax on corporations would be 0, but the government likes to hide how much they are taking from their people. And many fall for it every time.
1
Of course the economy is booming. Trillion dollar deficits will do that.
5
I have always heard that an outgoing President's claim on his successor's economy ends at 1 year. Trump is already well into his 3rd year as President, so good or bad - what we have now is the Trump Economy.
9
@dan h
you didn’t hear it from Nobel Laureate and Times Columnist Paul Krugman.
It was Trumps economy from the second he was elected.
1
It seems economists never learn anything. Every investment product advertisement comes with the disclaimer “Past performance is not a guaranty of future returns.” The reliance on statistical models is what created the last two major financial crises, as hedge funds and financial institutions relied on them to guide their leverage and risk management, without looking at their absolute exposure and adjusting for new realities. Statistics cannot capture the impact of new products that create massive leverage and distort the system - CDO’s and CLO’s, or the erosion of lending standards that fundamentally change the calculus of modeling. Luddites and partisans like Krugman are grounded in ancient parables informed by irrelevant policy beliefs. Every cycle is a new paradigm. It may still be that what goes up must come down, but the limitless expansion of central bank balance sheets may, in fact, have consigned that chestnut to the dustbin.
1
What we have is inflation of the job market. More workers entering the workforce under the strain of stagnant wages. More and more women, retired people, and new immigrants (reserve pool of unemployed) are entering an expanding job market created by the upward mobility of the educated workforce. No real gain in per household wealth!
1
the economy is booming for some people but not others (people who are older are struggling because ageism is real). something ive noticed is that for people my age (older millennials) we have become so accustomed to low wages and lack of job security that we are willing to work for less than we need to. ive been encouraging all my unhappy friends (there are many) to polish up their resumes and apply to better paying jobs since unemployment in my area is very low. there's no excuse right now to be making a bad wage. i managed to up my wage by $6 an hour in the last year via job hopping and being adamant that i get paid a fair wage. i FIGHT for it. its nice not to feel desperate, like i did during the "recession" which was really a great depression that kicked people out of their homes and transferred wealth from the working and lower middle class to the extraordinarily wealthy.
regardless of how good the economy is right now, i will never give trump credit, as his policies will hit us in a few years from now. guarantee you - mark my words - the student loan bubble WILL burst in the 2020s. growing income inequality and a lack of a common "truth" (everything is fake news, george orwell warned us about this in 1984) will lead us to civil war 2.
2
THE TRUMP CREDIT CARD
Please, please, please stop with the “Trump Economy” fallacy. He did not create this economy; he inherited it. If you want to call it the Bernanke Economy or Geithner Economy or Paulson Economy rather than the Obama Economy, fine. But it is not Trump’s economy. Just look at the numbers. Look at the angles of growth. See where the turn from down to up was made. That’s where the real work was done. Trump had nothing to do with that.
But even worse than stealing credit for someone else's accomplishments is what he is doing to the economy’s future. The increased growth that he now claims credit for has been purchased with a giant credit card. We feel rich today, but when the bill comes due tomorrow the entire economy could collapse into bankruptcy—and he will have been the cause.
Bankruptcy, not business, is what he has proven to be most successful at.
And now, instead of a casino to ruin, he has control of a country.
4
@H. A. Sappho Wrong, tax cuts and deregulation equals greater productivity which means a booming economy. It always works.
6
@mmmmmm
Tax cuts for the wealthy do not stimulate growth because the rich don’t need to spend it; tax cuts for businesses and the middle class do stimulate growth because they do need to spend it. The Trump tax cut was massive for the wealthy, and permanent, but for the middle class it was miniscule and will expire in ten years. That by itself should tell you about the cut’s intellectual honesty.
Meanwhile, the cost of this massive tax cut for the rich is an explosion of the national debt that will eventually lead to insolvency and collapse.
Deregulation does stimulate growth, but at the cost of safety. Deregulate building codes, and buildings collapse. Deregulate airplane safety regulations, and airplanes crash. Deregulate Wall Street and you have the Great Recession teetering on the cliff edge of the Great Depression.
1
@H. A. Sappho. Unless Big Government stops them, construction companies and workers will deliberately build buildings that will collapse??? The only reason plane manufacturers and pilots don’t deliberately make defective planes and crash them into the ground is because Big Government regulations prevent it??? Are you serious?? I suppose that when you drive your car you’d smash into a tree at high speed on purpose if Big Government didn’t enact a regulation against it!
1
Anyone that wants to work these days, is able to work. You can drive for Uber or Lyft; deliver food for GrubHub or UberEats; you can create a Podcast or video blog; You can webcam model for Streamate. There was no brilliant economic policy that was put in place over the last two years. However, there were millions of opportunities that have been created over the past decade that have low, to no barrier to entry. Everyone is able to work these days. Corporate American did not start creating millions of jobs over the past two years in return for the massive tax cut it received. Silicon Valley created millions of gig-type jobs.
5
The numbers don't lie. Like the man or not, you have to give President Trump credit for working a tax cut through Congress AFTER the GOPers there had bought the collusion myth for months.
Then he also shrinks government and takes out the built-in land mines of zealous over-regulation left behind by the Grest-Big-Gov't types.
Another story today finds the Dems can't recruit good Senate candidates with name-rec. Who'd want to spend months running for office only to get here and sit through another four years of GOP control and HIM in the White House?
6
What we have is inflation of the job market. More workers entering the workforce under the strain of stagnant wages. More and more women, retired people, and new immigrants (reserve pool of unemployed) are entering an expanding job market created by the upward mobility of the educated workforce. No real gain in per household wealth!
I can no longer deny it. For the first two years of this administration, I argued Trump inherited a surging economy from President Obama. There comes a time when the numbers can't be denied.
Uncle!
It is Trump's economy now. Congratulations to our President and the Republican Party. What is not to like about a booming economy? I wish them continued success. The next hurdle is productivity growth.
That said, I will do everything I can to defeat our incumbent President in the next election. I am embarrassed for America that he speaks for me.
4
@Joe Aaron The plans of the left are to reverse everything positive that has been accomplished. It would be wise to not cut off your nose to spite your face.
1
With about 500K Americans employed in the health insurance industry, this looks like an opportune time to convert to single payer health for all: In a mere 2 months, all the workers laid off from health insurance sector will be hired into other jobs.
Health insurance worker "problem" solved!
8
@NeverSurrender Don't forget the huge number who administer billing at the hospitals. This is hearsay, but someone told me once the billing departments in large Canadian Hospitals are tiny compared to those in similar size US hospitals.
1
@NeverSurrender Then the government will mismanage the whole thing and all savings will be lost and massive debts will begin to form. You have some very bad ideas.
1
Trump deserves more credit than NYTs readers are willing to give him. And he'll take that credit on the stump in 2022, and he'll take the presidency in 2020. It's the economy "NYT readers". Tax-cuts and deregulation matters. Relaxing environmental controls helps. I'm not sure his trade wars are helping yet, but nations are sitting up and watching at least. Now if the dems could stop the ridiculous witch-hunt which really looks infantile and desperate at this point, then countries will pay even more attention. Heads of state weren't sure if he'd be impeached, and didn't know who'd they be negotiating with in a year. Trump was chosen for a lot of reasons - and common sense economic policy was one of them.
264
@Donald Driver Please help me understand the deregulations that help the middle-class?
My taxes were about the same, the payroll cuts in federal taxes off-set my tax return, so it's almost flat.
73
@Donald Driver
"What will it profit a man if he gains the whole world, yet forfeits his soul?" Matthew 16:26, in the Bible that evangelicals have forsaken for an apostate president. Another, "Woe unto you who call evil good and good evil."
76
@Donald Driver "Relaxing environmental controls helps." I guess you don't have any kids or grandkids... They would suffer, not you.
150
And remember Paul Krugman's famous election-night 2016 forecast: "If the question is when markets will recover, a first-pass answer is never."
It took about a day for the markets to "recover."
12
@Decent Guy And I don't feel a bit sorry for all the people that went short in the futures market election night.
2
We're buying this on credit. We'll have to pay it off eventually.
3
This blows my mind - the government has pumped trillions of dollars into the economy since the recession in 2008. How could we not be having one heck of a party? Problem is, it all on borrowed money.
And no inflation ? Yes thats true for energy which everything else runs on. But medical and real estate costs are truly staggering. (and many other things)
What happens when energy goes back up as it did before the recession? The house of cards will eventually collapse and its going to be an awesome thing to see.
2
@Debque Have you ever heard of supply and demand? There is a glut in the oil market.
1
Ironically, it would be a good time to keep on stocking up on cheap labor from Mexico if Trump wants continued low unemployment without inflation.
1
@Covfefe If the democrats could bring themselves to work on a coherent immigration policy instead of chasing the impeachment pipe dream that might happen.
2
Who is surprised that the desired technocratic dictatorship of experts could be over-selling their capabilities? These experts are flawed in the same ways everyone else is, lacking humility, and prone to emotional bias.
The poster child: Paul Krugman, Nobel Prize Winning Economist, Nov 9, 2016 – "If the question is when markets will recover, a first-pass answer is never."
It doesn't mean you never listen to experts, it means you must maintain healthy skepticism on overly simplified explanations of complex systems where the alleged expert has little track record of success.
5
Low inflation? It’s rather high, actually. You just aren’t looking in the right places.
An epic asset bubble has formed in our equity and bond markets; that should be your first clue about what’s actually going on. Also, historically high commercial property valuations, especially in high-density east and west coast areas.
No mystery why it happened. The Fed had to create trillions of new dollars 2009-2014 to prevent the United States from suffering a second Great Depression. Most of that new money was deployed to bail out the imploded banking/financial services sector, and over the next few years all that new liquidity slowly worked its way into the nation’s frayed financial fabric on our “left” and “right” coasts, bypassing much of so-called “Flyover America”, which mostly missed out.
Meanwhile, millions of homeowners who lost houses through foreclosure during that same period experienced no growth or subsequent improvement in their usually desperate financial situations. They have been left behind. Another clue is their overall indebtedness and their monthly cost of servicing that debt measured as an “annual percentage rate” (“APR”). Both are at historically very high levels; more missed inflationary signals.
3
Professor Krugman please explain why, although the economy is "booming" , life is worse and the Middle Class keeps shrinking.
4
@Tom Miller Yes, the great Nobel Prize Economist Paul Krugman! Wrong 100% of the time. It is impressive. LOL!
1
642,000 people added to the non-participation list.
That's not a healthy economy and skews the unemployment rate. It is closer to twice that. U6 rate is the true rate.
Also, I'll be dollars to dimes the NFP number is adjusted down 100,000 next month. But no one will write an article about that.
Look at all the downward revisions in the past 12 months. Total joke.
1
I urge those celebrating this news to scroll down to another item on today’s front page.
The End of the Line , a reporting on G.M.’s “unallocating” its Lordstown plant, and the devastating consequences for the people of Lordstown. Just ten years ago, G.M. received a $50 Billion bail out. It currently pays its CEO, Mary Barra, a $22 million dollar salary. Wages in the regional economy around Lordstown have fallen by 6 %. Thousands are out of work with this closure. What people need to realize is that it is big corporations and their CEOs, and the very small percentage of the population wealthy enough to invest in the stock market who are the real beneficiaries of this economy, not the average working man and woman who seek a living wage. Certainly not the people of Lordstown. “Wall Street investors cheered the shedding of the “legacy” costs — pensions, health insurance — associated with G.M.’s American workers. On the day of Barra’s announcement, the company’s stock closed nearly 5 percent higher”.
Dave Green, President of Local 1112 of the UAW in Lordstown asks “what does unallocate even mean?”
Hardship, it seems.
4
Are these based on government statistics? If so, I wouldn’t trust them in the era of Trump. Look around. Every fifth car in my city says Uber/Lyft. I wander how many of these “jobs” made it into the report.
4
"The old relationships and rules of thumb no longer apply." Words heard shortly before every financial crisis in history. Sell.
2
Trump has delivered an economy that progressives can only promise us.
10
@LTJ You're wrong about progressives. They told us that the economy could not grow like we are seeing, and that we would have to get used to little or no economic growth.
3
Once upon a time help wanted ads used to specify the salary range offered.
Now they don't. You don't find out what is being offered until you're in the interview loop.
I suspect that this is because the salaries are ridiculously low.
2
@Jerry Engelbach The data does not support that of course. Wages are rising faster than ever. The left just can't catch a down turn when they need one.
2
No economist here but shouldn't this 'rosy' economic picture include a tinge of 'black' given that the Trump's Tariffs are costing American consumers 1.4 BILLION per month and totaled $69 BILLION in added costs in 2018 according to a study by Columbia, Princeton,and Federal Reserve Bank N.Y.
1
@Emma Jane
Pocket change in a $20 TRILLION economy.
1
Trump’s hit it out of the park. He’s been good for the economy and American workers.
9
For America's partisan Democrats, every silver lining has a cloud. Historically low unemployment? Yes, but that guy is making more than I am and has better benefits! Booming stock markets? Yes, but I chose not to participate in my company's 401(k) plan or invest in an IRA! Low inflation? Yes, but it should be lower! And on and on. Good luck to those among the 25 or so running for president who point to socialism as a "solution" to America's prosperity. Americans won't be buying it.
8
Yea the economy is booming, and the US deficits is booming too. I taught when you make money you used some to pay down your debt? Does it make sense to boost and brag when you have $1mm in bank but have $1.2mm in debt?
1
I'm 3rd party and it's amazing how far people will fight within themselves not to give Trump any credit. ... remember, the current state has evolved under both Democrat and Republican Presidents. .... both of which have done good and bad.
3
Nothing to see here, voters. Oh, yeah, this wasnt supposed to happen. Trump was a bad man, so Democrats were predicting that nothing but bad would happen. Now that the economy is undeniably booming -- not just the stock market, as it was initially dismissed, but employment and wage growth -- Democrats are still finding ways to... deny it. The jobs don't have benefits, theyre just gigs, theyre not affecting everyone. Well, I'll take a non-benefits-eligible job over no job at all, which was my situation for five years. And my taxes were cut in half because the standard deduction doubled and I never itemized because I don't own a home. Everyone is hiring in the economy that matters to people like me (I'm an "older worker"; my supervisor, another relatively recent hire, is young, male, and black). This wasnt supposed to happen, and people like me arent supposed to exist. Will the economy tighten up again if a Democrat becomes president and reinstates job-killing regulations and free trade, and encourages the Fed to raise interest rates? I will be listening to the candidates to see if we continue to be ignored.
4
How often did we hear from talking heads that Trump would mean the end of life as we know it? He was going to kill the economy, start wars, etc. I seem to recall that some commentators were saying that the election of Trump would literally be the end of the world.
Well, we're not in any pointless overseas wars, the economy is booming beyond all expectations and we're all still here to tell the tale. Who would've though? Oh, wait...roughly half the electorate.
The cherry on top of all that is that the Trump economy has benefited everyone...across the spectrum. Women, African Americans, Latinos...everyone is better off then they were under Obama.
Sure, Obama had many strengths...but clearly he didn't have all the answers. I guess skilled rhetoric and polished speeches don't always translate to real-world results.
AND YET...some people still can't accept the reality that there's a duly elected president in the White House who DID NOT collude with Russia AND has been delivering for America. Willful ignorance and selective blindness, I guess.
I'm not saying that Trump is without faults...he has many. But he's proven the experts wrong time and again, and any open-minded American can see that fact.
Be careful who you nominate, Democrat leadership...Socialism may make great sound bites, but I doubt America wants to abandon the progress that has been made in making America great (again).
Sorry...couldn't help myself. The line wrote itself.
9
To try and put a negative spin on these numbers is ridiculous. The economy is doing very well by any objective measures.
10
Really, nobody knows much of anything about the future, now do they? There is much comfort in that.
1
I hope Neil looks in the comments section of his article and writes a follow up about what the middle class is actually feeing because his points are pretty moot in regards to todays worker.
I'll add my voice to other readers' voices urging the NYTimes to tell a deeper story. Where is there talk of the yawning chasm between the super-rich and the rest of us? Or, equally concerning, the actual numbers of Americans at or below the poverty line: "Yet other scholars underscore the number of people in the United States living in 'near-poverty,' putting the number at around 100 million, or nearly a third of the U.S. population" -- this stat from the Routledge Handbook of Poverty in the United States (2015). Who are we kidding trying to tout the strength of our economy when 1/3 of us are at or below the poverty line? Please, NYTimes!
2
@From Ohio Quit the lame wealth envy. If you invent something wonderful you will be rich too. Also America's poor are rich in the rest of the world. If you want all of us poor then copy the bad ideas coming from the rest of the world.
1
"The Phillips Curve is irrelevant". Great that someone writing for a liberal newspaper which typically has a Keynesian bias is willing to acknowledge this fact.
Now why does a low unemployment number not cause wage based inflation? There are several reasons:
1. The labor force participation rate is still low. There are plenty of people "on the sidelines" who are no counted in the official unemployment number. In other words the economy has plenty of capacity in terms of workers to grow.
2. Businesses are very adept at finding workers in other countries when they need them. So the supply of workers in the US is not really a constraint to the growth of US based businesses.
3. Business are adept at augmenting the productivity of their workers with technology, automation, and AI. We are starting to see this in the vastly improved productivity numbers.
Now you only have to believe one more thing. You have to believe that putting more money in the hands of the people and businesses that earned it is a good thing relative to taxing that money away. Private sector incentives matter.
1
So darn funny two years into Trumps Presidency and we need all new metrics to explain the economy. You can’t use the same stats you did for Obama that’s ludicrous the worlds has completely changed in 2 years. I mean after all there has to be collusion it’s just under that one last stone we have turned over and over again
4
Before you declare the Phillips Curve irrelevant it is necessary to have integrity in the data. The U-6 number is closer to reality.
At the same time, any adult supporting a family, will tell you that the inflation number put out by the government is complete hogwash.
1
I’m not a Trump fan, but this economy is by most objective measures very strong. To try and deny that is a fool’s errand.
7
A quarter point from perdition isn’t booming.
1
low inflation? someone is cooking the books
1
Just think of all the money that company is making which sells little plastic extensions to make a sedan back seat "like a bed".
1
I'm 3rd party and it's nice to finally see NYT giving Trump some credit. However they still have to be bias. THE STORY HERE IS what IS HAPPENING NOW is what Obama said COULDN'T happen. They are giving credit to thinking outside the box of politics. It's what Trump did that ticked off both parties. Maybe putting a business man in charge of business instead of politicians is something to consider next time you vote.
7
@Robert It is way to obvious and logical it must be rejected right? Trump is rocking it but they can't figure out why.
1
It seems like some of the commenters here are economy deniers.
9
Economy is booming unless you are in your fifties.
1
“where are new workers going to come from with so few out of work, after all”
Outsourcing? Automation?
1
Hey, anyone need a terrible job? The Donald Trump administration just created 263,000 of them!!
Seriously though, with these kinds of numbers, it’s going to be harder for millions of Trump supporters to make excuses for being unemployed—but we all know they will.
1
@Kip You seem to be talking about Obama folks that are unwilling to work.
1
Jobs numbers are booming. Homelessness is at record levels. Solve for X.
2
Trump deserves credit for this.
MAGA!
5
And there are people begging for money on every corner in Durham and in New York because?????
2
@Christopher Ross Those are called leftist policies.
1
In other words, Trump has done a great job, despite all the hatred of leftists who, by the way, promised us that he would destroy the economy and start a nuclear war as soon as he entered the White House.
2
This is a horribly incompetent and irresponsible portrayal of an economy that continues to undervalue and exploit hard working people in the service industry, media, academia, & nearly all other industries. Costs of healthcare, childcare, education, & houses are blowing away income for most Americans. CEOs still make 750× those who actually make their money. Gains from any economic growth go directly to the top. Articles like this are why some lambast the NYT for being an elitist rag. With articles like this congratulating the richest for continuing their ongoing con job, it's hard to argue that point.
3
@Nick Wealth envy is a sickness. The filthy rich typically are great at what they do. It is like you trying to be an NFL quarter back. I do not see the left demonizing them for the skill they have and the money they get paid.
1
Running up a trillion-dollar deficit & giving monthly welfare checks to farmers during a strong economy isn’t supposed to happen, either, but the Trump Administration is doing both, not that the Times uses big, bold headlines to inform its readers about those issues.
2
What a joke...at least here in the SF Bay Area where rents, health care and college are through the roof. Aside from Presendential candidate Andrew Yang no one is talking about the very out dated metrics like unemployment and GDP!
3
How much of the NYT change of heart in giving Trump credit for much (some) of the surprising, dare I say amazing, economic performance of the past two years, is due to the Mueller report and the ensuing disappointments arising in the progressive media?
1
The best economy in several decades and yet the commentary here is so incredibly cranky.
5
I've gone through a few hundred comments and find most commenters live in a river in Egypt, probably with head buried firmly in the sand.
80% of American voters don't follow political news daily as most of we NYTimes' fans do. There are 320 million Americans, but top three cable news networks together attract 5 million viewers daily to their top shows.
Most Americans devote nearly all energy to work and family and only begin to pay attention to presidential race after Labor Day 2020 when debates start up. Voters will be weighing substantial gains in wages, job security, 4 years of peace, 2 years of Dem charges or Russian collusion proved wrong and weighing a change to losing their health care, losing their cars. 60% tax rates. Trump is a boor but they just ignore his most bombastic tweets by now.
James Carville: "It's the economy, stupid."
3
What a surprise! Despite the overwhelming economic ignorance of Democrats and their attempts to subvert Trump's presidency, he managed to elicit an economic boom.
I'm sure that this will be treated as surprising and somehow bad news by the NYT.
6
Two plus years of neverending witch-hunt, which a this point feels more like a part 3 of a movie, which started exciting on part one (“the Russian Collusion!”), then part 2 (Mueller and Barr”) went “meh” , and then part 3, “yawn, I’m not even going to waste my time”. Kind of like “The Matrix”, part 1 Great, part 2 meh, part 3 (really?).
And still with all that, plus a brutal treatment by the MSM at every turn, Trump has managed to govern on the promises he gave: a revival of the economy, including jobs and labor. 2 Justices in the SC, ban on Muslims, still fighting for the wall, confront of illegal immigration head on, confirmation of many judges, dramatically reduced terrorism, ISIS on the run, renegotiation of those trade agreements that have been so detrimental to American, even confirmation of 1st amendment rights on those odious free speech suppression centers (aka universities)...
It’s impressive all he has achieved in 2 years considering the aggressive environment he has had to deal with.
Good job.
7
Thank you, President Trump.
6
You would NOT Be reading the headline in this article if Crooked YOU KNOW Who had won, We have a President for the first time in a long time that The World KNOWS is a Doer and a Mover 2020^
4
The article is right on about traditional economic rules not being the seer of tomorrow. All economic theory before we went off the gold standard in 1971, needs modernizing. Also, economics is a behavioral science, not a natural science. Thus, the rules are not absolute.
The article is wrong about this being a runout of Obama economics. President Obama neglected the Investment segment of the GDP formula:(GDP=Consumption+Government+Investment+Exports-Imports). Instead he went all in on Government . The only thing President Trump has done is relieve the risk government threats to investors. Nothing more.
Let's also remember how Obama and Clinton told the American people 1.5 GDP was the 'new normal'. If the Democrats instigated this job growth, why were they telling people they had to learn to live with slow growth.
2
Simply put. American capitalism is an economic powerhouse that flourishes when unimpeded by government. Only those with a political agenda can’t see that.
7
Mr. Irwin’s reference to the Phillips Curve is interesting. During the 1970s (I believe), I read an article in “Technology Review” by the economics Nobelist Robert Solow. The aspect that caught my attention was Prof. Solow’s remark that the Curve seemed to be shifting (N.B.: even then!), which meant that parameters in the Phillips equation were changing.
An experimental physicist, I looked at the economic statistical analysis differently. I suspected that Solow’s observation undermined the validity of the Phillips theory (Solow didn’t say that, however). No valid physical theory contains parameters that change over time. Time-dependent changes in Phillips Curve parameters must mean his theory is a form of curve-fitting – not a description of an underlying Economic Law.
In this article, Mr. Irwin observes that “the last few years have made it clear that the Phillips Curve – the relationship between unemployment and inflation – has either changed shape or become irrelevant.” I suspect that economists should, years ago, have sought a subtler theoretical description.
1
There is one thing that remains constant in the economy - just when you think nothing can go wrong, it does.
This piece has it right when it states that an economy is too large to understand all the relevant details. A few saw the mortgage loan disaster before it happened. When they tried to alert the public, nobody took them seriously. They were making too much money.
Something as fatal as another mortgage loan crisis may not be out there, but something is. The US economy is too large and complex not to have some significant flaw. In today's economy, bad things spread faster than anyone ever anticipated.
For The Fed holding steady is a good idea. A time to apply the breaks is coming.
2
Might it be that we are simply at the beginning of a long term economic cycle. American capitalism can be thought of as a Yellowstone economy. In 1988 there was a great fire that destroyed old growth forest in Yellowstone setting the stage for an era of prolonged diverse growth in that section of the park's flora and fauna. Depressions serve as our economy's reset button.
We have been told over and over again how wealth inequality reached levels unseen since the 1920s in the period leading up to 2008. What has not been acknowledged is how The Great Depression corrected that circumstance. The Great Recession was capitalism'S attempt to self correct.
Fed policy prevented capitalism from fixing what was broken in our economy. A Keynesian approach would have been better than what we got (quantitative easing). Growth rates would have been higher, the wealthy would be able to invest in truly productive resources (investments made from their reduced fortunes) rather than flooding people's mailboxes with offers from entities like Prosper and Lending Tree seeking returns, and there would have been a rising tide that truly lifted all boats.
An economy in renewal is one where there is high growth and low inflation. This renewal is unfortunately created by economic conflagrations similar to the very real one that ravaged a huge section of our greatest national park.Just some food for thought. And an argument that depressions are a necessary part of American capitalism.
1
But, but, what happened to the eminent Nobel economist, Mr Paul Krugman's forecasts? As I recall, he said Trump's election would result in a recession? My favorite quote regarding the markets, "It really does now look like President Donald J. Trump. And markets are plunging. When might we expect them to recover? A first-pass answer is never."
Perhaps Mr. Krugman
5
The one phenomena that is unique to this steady economic cycle that could continue for several more years is the unprecedented aging out of the ‘baby boomers.’ Employment may have increased by 200,000-300,000 per month but 1,950,000 baby boomers are eligible for retirement in that same month. Many of these boomers are at the top of their pay scale with replacement hires coming in at a fraction of their salaries.
Coupled with the rise of the gig economy, the huge boomer replacement effect may indeed be ‘changing the rules’. As for Mr. Trump and the political class, their thanks should be going to the Greatest Generation who created the Baby Boomers.
Jerry Saltzman
1
The Phillips curve actually blew up as soon as the Fed started to act on it in the 70's. Besides that the Fed was totally unable to control the growth of the money supply at that time. Inflation and unemployment both went to very high levels in the 70's and 80's. Then as soon as there was a test of NAIRU (Phillips curve II) in the late 90's it also failed. The idea that central banks control inflation has simply failed every test. The reason that predictions of inflation from the Fed's massive intervention after 2007 were wrong is that the interest-rate cuts did not - and still do not - boost investment in the way assumed by monetary dogma. If making more capital available through massive tax cuts does not cause more investment, why should doing so through low interest rates - and actual negative rates in Europe and Japan - do so?
If governments are going to constructively influence economies the idea that central banks can do the job has to be discarded.
1
"The Economy That Wasn’t Supposed to Happen: Booming Jobs, Low Inflation"
Actually, it's the economy the Left hoped wouldn't happen and now regret is happening. It's the economy that proves, once again, that the Left's favourite mode of governance, a highly regulated, heavily taxed, economy, works poorly.
"But beyond the assigning of credit or blame, there’s a bigger lesson in the job market’s remarkably strong performance: about the limits of knowledge when it comes to something as complex as the $20 trillion U.S. economy."
More or less.
It's not so much about "the limits of knowledge when it comes to something as complex as the $20 trillion U.S. economy," it's that just about any national economy is mathematically, literally, chaotic. Technically, it's a non-linear dynamical system. (Among other things, I'm a mathematician.)
Two of the characteristics of non-linear dynamical systems are that they are unpredictable in any kind of detail and their response to any stimulus is generally unrelated in any apparent way to the stimulus. (An artefact of the so-called "butterfly effect.)
You can't control a system if you can't predict the effect of anything you do to control it, and among the most profound of the Left's fallacies that they can regulate an economy in order to achieve any specific desired result. Just about the only guarantee is that the "unintended consequences" of controls will be greater than, and wildly different from, the intended result.
3
"In mid-2016, Fed officials thought that the long-run rate of unemployment would be around 4.8 percent, and that this would coincide with 2 percent inflation" Had democrats retained control of the Whitehouse, I have little doubt those official prognostications would have been correct. While I do not give all the credit for our booming economy to Republicans, I do give MOST of the credit to Donald Trump, who has financially supported candidates on both sides of the aisle AND has been demonized by both. We the people love you, Donald.
6
You need to include context with total labor participation rate as well. Unemployment numbers can be artificially low if more people have dropped from actively looking for jobs.
1
The most likely explanation is the return into the workforce of those who had given up finding work. Together with tax breaks and deregulation, uncounted capacity fuels the low-inflation boom.
1
Whatever prosperity we seem to be enjoying, it is illusory as long as we remain $trillions in debt.
1
It seems increasingly likely that central banks, having bought significant percentages of their own nation’s debt, will begin to cancel large chunks of those bonds, and systematically continue to do so as long as inflation and the currency remain balanced. The Fed could extinguish $5 trillion of the national debt tomorrow with zero impact on the markets, except to fuel a race to buy more financial assets with those liberated dollars - still very much the global reserve currency. As oil is replaced by alternative energy in the coming decade, the reserve status of the dollar is likely to remain unchallenged - China is simply too unreliable to attain such status for the Yuan except among its vassal states. In such good times, it may be there is a new paradigm for debt that could extend an expansion to its theoretic limits.
1
"The last few years have made it clear that the Phillips curve — the relationship between unemployment and inflation — has either changed shape or become irrelevant." Really? Or could it be that our old tools for measuring unemployment (the x-axis of the curve) are no longer adequate? If the existing models are re-ran using much harder to get under-employment numbers (prime-age unemployed for any reason) they start to make more sense.
Maybe the Phillips curve is no longer relevant or maybe we got lazy and didn't update our statistical tools in the changing economy for 50 years. Occam's razor would favor the latter.
1
Almost all economists agree that its folly government to try to manage all aspects of an economy Soviet Union style, and yet most of our mainstream economists believe that an unelected politburo of economists not only can but should manage the financial, monetary, employment, and inflation aspects of our economy. They have complex formulas for cause and effect in the macro-economy. Trouble is, macro-economics depends on human actions. And human actions change over time, cultures, and locations. So the formulas don't hold forever more like say in thermo-dynamics or some other physical science. The economists suffer from science envy. Macro-economics likely has way more complex relationships than macro-economic models and most likely the relationships are way more non-linear.
The Fed meddling in the economy likely does more harm than good. The long period of forced low interest rates by the Fed may have caused the 8 years of stagnation. Of course the mainstream economists came up with such babble-speak as "secular stagnation", which was code word for "its not our fault". Except it was their fault.
Why can't we do an experiment? Let's limit the Fed's mandate to lender of last resort. Period. No inflation or employment rate meddling or anything else allow.
1
Not to be flippant - but what we need are more of one handed economists.
You know what economists always say, "on one hand, this economy is hard to believe, but on the other hand, it could crater any time."
It's also interesting to note that no one uses the "Goldilocks" term to describe a sweet moment of steady growth and low inflation.
I guess we buried Goldilocks in the last century.
This POTUS deserves all the credit for this animal spirit of American economy.
They also say that "if it ain't broke, don't fix it."
He recognizes that less is more when it comes to government regulations, taxes and a generous lessaiez faire attitude.
Unlike any country on the planet, Americans show that we do our best when government quits being a Nanny.
An American president had said it best "business of US government is business."
As in government staying far away from business.
4
It's odd how Republicans don't talk about the deficit anymore.
There is certainly truth to the notion that economists have not yet adapted to new conditions. I don't necessarily understand it either. It does seem that inflation is no longer a concern and that globalization has something to do with that.
But it's also clear to me that we don't have a healthy economy. In the end Keynes turn out to always be right. Trump made a cardinal mistake, he enacted a large stimulus at exactly the wrong time, in the middle of an expanding economy. It will catch up to us. We'd be better off with slightly slower growth and slightly higher unemployment while paying down the debt. Instead the Trump stimulus has taken us to the edge of a recession. It can come next year or the year after, but we are close. What will Republicans say then? We know what they will say if it comes during a Democratic presidency. What will they say if it comes after a Trump reelection? But it's coming.
1
@PNBlanco We can't pass a budget unless Democrats insist that the pig are fed. Democrats do not have America's best interest at heart.
1
Yes, and we must remember something which Mr. Trump either ignores or, more likely, does not understand: we live in a globally interconnected economy. Even a presently strong economy like ours can be shaken or even pulled down by economic policies and decisions beyond our control.
The financial crisis of 2008 seems to have originated here and sent ripples abroad. One of the things which made that crisis so devastating for so many is that folks became lulled into believing that the good times had no end. Many individual investors either misunderstood the stock market or deluded themselves into believing that its only real direction was up and up and up.
A million things can send any economy, including ours, into a skid. Some of those things are in our control, but in today's world many are not. Therefore, predicting upcoming down-turns, even severe ones, is neigh on impossible. Fear is not helpful nor is being overly cautious. That said, keeping all of this in mind is essential. We must live into the good times while always planning for the worst.
1
Give me your credit card and i'll do amazing things.
The growth of the deficit, the cutting of services, the low minimum wage all are good for business--in the short run. But remember what Keynes said, "...in the long run, we're all dead".
Oh, and Ill wait until someone else, (next Dem. administration) pays the credit card bill.
4
It really isn't that complicated. You have jobs and a better economy and obviously inflation unless of course one little factor is missing from the equation; wages. Better jobs and economy MUST result in inflation UNLESS wages are stagnant. Now this current status is great for big business and big investors but if wages do not increase it is not great for the working man which of course is not surprise given the current Government.
6
@Tarkus Lucky for you wages are going up faster than they have in a decade.
1
Shouldn’t we be more engaged in the survival of the planetary ecosystem than supportive of deregulation?
1
I am always disgusted when I read the economy is doing "well". All it means is that on average more money is being made, which may simply mean billionaires are making more billions. This rarely translates in better lives for most. In fact in some extreme cases good economy means tragedy for many, bad economy more happiness.
Extreme example was reported by Tom Marcione an anthropologist who noticed in Jamaica infant mortality went up when the economy went up and went down when the economy went down. Now can you imagine a sorrow bigger than losing your beloved child? (this is how "infant mortality" translates in human terms). While the cultivation of marginal lands for subsistence farming rather than export crops reduced nutrition contributing to children's deaths, the other factor was instant formula. As soon as an improved economy made money available multinationals such as Nestle moved giving free instant formula samples. Where water to mix the powder is not clean this was a formula for disaster which caused a worldwide boycott. Tom left CWRU and served as academic advisor to the boycott organizers that eventually forced Nestle to stop aggressive "marketing" pushing instant formula in third world countries.
Similarly so called economic debacle in Greece did not harm quality or life for most Greeks. No one lost their house because they got sick. Bad economy means billionaires cannot bilk billions from the country, a Greek friend told me and added do you care?
5
The Phillips curve has been outdated since the 1980s. Inflation responds to rational expectations. It's in every economics course in every college.
I have a bachelors degree in the subject which makes me far from an expert but I know that much. What is any supposed expert doing being confused by it?
2
Let's actually take a look at the Trump economy:
1. Job creation in Obama's last 27 months was 5.8 million, vs. 5.4 million for Trump's first 27.
2. The total number of persons with jobs has been setting records each month since May 2014. The unemployment rate has been improving since late 2009. This is not a new trend.
3. Job creation 6-month rolling average of 207,000/month through April 2019 is exactly the average since 2012.
4. CBO deficit forecast for 2018 when Trump was inaugurated was about $500 billion; the actual result after Trump's tax cuts and additional spending was about $800 billion, up 60%. Revenue fell by nearly $300 billion vs. forecast. Yes, tax cuts increase deficits...a lot.
5. CBO debt addition forecast for 2018-2027 when Trump was inaugurated was $9.4 trillion; the latest forecast is $13.0 trillion, up about 40%.
6. Real GDP growth of 2.9% in 2018 was the same as 2015. But the deficit was falling in 2015, while it was increasing in 2018.
7. Inflation for 2017-2018 is higher than 2015-2016, as are mortgage rates.
8. Real wage growth for 2017-2018 is lower than 2015-2016, due to higher inflation subtracting from Trump's slightly higher nominal wage increases.
9. The number of uninsured has increased by about 1.2 million since the end of 2016, due to Trump's ACA sabotage.
19
I think the key labor market slack variable is the labor force participation rate for the 25-54 (prime age) workers. At 82.3%, it is still below the pre-crisis level of 83.3% in November 2007. That is what economists missed in wondering why the low unemployment rate wasn't driving inflation; people were outside the work force.
Another article today explained that when you compare this variable vs. the wage growth you get a much better explanatory fit than the unemployment rate.
5
For many, the lived experience and the metrics don't align. What counts for full employment? What is in the basket of goods bought by someone living out of their car? And in a Trump administration, how trustworthy is the data?
7
Adding an anecdote that has shocked me and that I wouldn’t have thought possible had I not observed it.
An unmarried friend of mine with no family support has been working minimum wage jobs along the East Coast for the last couple of years— and making ends meet by *living in their car.* (The rationale: safer than living in a shelter and a cost-effective way to reduce living expenses and pay down debt.)
So, yeah, my friend is employed. But my friend is not solvent. So much for the “booming economy.”
5
@ANetliner Sounds like she probably has some person problems too. To in a car in this economy does not wound correct.
1
The "surge" in worker productivity will not translate to higher wages. Workers are being over-worked by their companies. They are afraid of losing their jobs. I see more ordinary mistakes being committed due to stress. In our era of inequality, the unemployment rate is no longer a good indicator of economic health. Many older people have stopped looking for work.
Companies are very attuned to consumer sensitivity to prices. Cars are being built up with more functionality with modest price increases. I just used 25,000 miles for a round trip ticket, coast to coast, with United Airlines at flight times that I wanted. This hasn't happened in 20 years. There are more price reductions in both online and regular stores for products from books, food, clothing, etc.
6
Anyone that wants to work these days, is able to work. You can drive for Uber or Lyft; deliver food for GrubHub or UberEats; you can create a Podcast or video blog; You can webcam model for Streamate. There was no brilliant economic policy that was put in place over the last two years. There were millions of opportunities that have been created over the past decade that have low, to no barrier to entry. Everyone is able to work these days without having to create a resume or submit to a job interview. Corporate American did not start creating millions of jobs over the past two years in return for the massive tax cut it received. Silicon Valley created millions of gig-type jobs that pay subsistence wages. That probably explains the low inflation.
11
@Robin Johns
And every single person employed in the jobs you listed is working without medical insurance provided. Each of them is one accident, one chronic disease, one diagnosis of cancer, one pregnancy, away from a financial disaster from which most will not recover.
Meanwhile, people are paying more for healthcare, food, utilities. And funny how no one mentions the rising cost of childcare, which is the highest or next to highest living expense for many young working families.
But let’s step back. The source of these numbers is the Trump administration, right? Maybe the rules didn’t change after all. These numbers may be as ephemeral as a Trump tweet factoid.
Why is the NYT assuming these reports are correct? This is not a country where we can trust the word of federal agencies. Not anymore.
2
@Robin Johns The good job I was promised in exchange for working hard and educating myself in this country is nonexistent. I have a Master's degree and I am told by the country that 25 hours a week in a gig economy job is good enough for me. Well, it's not. I did not work my tail off my entire life so that I could just barely survive in the United States of America.
1
Neil Irwin is correct about one thing (and only one thing): The assumptions that guided economic analysis through the postwar period and proved reliably predictive no longer have any value in the 21st century.
The only thing "booming" is the forty-plus year, neoliberal assault on the middle class and workers. And, it is succeeding beyond the wildest dreams of its designers and beneficiaries.
* The link between wages and productivity is shattered.
* The link between increased profits and reinvestments in the company, including wages and benefits, is shattered and replaced with the highest quarterly dividends possible.
* The definition of workers' compensation is now the lowest possible wage with no benefits, including many corporations who pay so little that many full-time workers qualify for public assistance (socialism that pays the corporations).
* Many workers are held to less than full-time hours in order for companies to take advantage of a myriad of savings, leading to widespread underemployment and workers holding multiple jobs to earn subsistence income.
* Pensions and benefits have been "bankrupted" or similarly avoided when they did exist. They are now a fleeting memory like fins on a Cadillac or a 45 record.
* The compensation of CEOs, executives, investors and financial paper pushers explodes to the stratosphere while wages stagnate (1% growth last year after inflation).
This is the new normal.
Irwin says, "Shhh. Don't muck up the 'booming' narrative."
11
Putting it simply, economics, especially macro-economics, is not science, despite various institutions and individuals which like to claim it is, a relic of the '50s and '60s attitudes, when science was held in very high regard in this country.
The methodology of developing economic statistics needs to be examined closely and done so in context. For instance, I see no indication that economists, at least as far as "conclusions" go, factor in the demographic changes, especially that a far greater percentage of women are in the workforce and, thus, family statistics are now based on two wage-earners rather than one.
Also, though they take the credit for good news and shun responsibility for the bad news, Presidents have relatively little power to affect the economy past the day's headlines and the momentary activity of stock market traders.
4
I question the current algorithms.
Have there been changes to the methodology used by Treasury to produce these economic indicators under Secretary Mnuchin?
Given the "Outlaw Cabinet" and other documented illegal activity in govt policy like Sec. Ross & the citizenship Census question, this is a legitimate query Congress should ask.
(Public estimates of econ indicators have never been this CONSISTENTLY below the released numbers. These are experts in the field.)
3
For one, Trump, in 2016 dismissed the unemployment number as a hoax and actually at 15%. That’s lie 10,001. Secondly, the economy was dismissed by Trump as not benefiting the working class or the middle class. Nothing has changed particularly as he boasted to his wealthy friends all the money he made for them in his tax cut bill. The fraud just has 18 months left in office.
2
It's possible this is a "it's different this time" trap and that inflation will eventually emerge. If it does, hold on because it is going to shock the system, which could cause losses in debt and equity markets.
1
My economics professor 40 years ago, when asked what he taught, replied, "Contemporary mythology." As others stated it is an inexact science. It should not be called a science and is, indeed, in large part dictated by political prejudice.
Today's news, in addition to the new jobs and low unemployment is touting the increase in wages, including the low end of the scale. Republicans are taking great credit for that in spite of the fact that they fought tooth and nail against any increase in the minimum wage. Local passage of minimum wage increases not only have raised the pay levels, but have forced huge increases in the average by large employers such as Walmart and Amazon raising their pay in trying to compete for quality employees.
This rise in pay is also a factor in more people going out to apply for jobs that will enable them to earn a "decent" salary.
Not trying to minimize the good news. Many people may be able to only work two jobs for 16 hours a day to try to have a decent standard of living.
2
Let’s start with a fact: the economy is doing well. Trying to deny it is on a par with denying climate change. A fact is a fact. Should Trump get the credit for it? If previous presidents got credit for economic improvements on their watch, why shouldn’t Trump? Is the economy working for everyone? No, but no economy can. It is easy to muster examples of economies that work for no one (Venezuela, the USSR) but none that works for everyone. There are poor even in Norway. Once the Democrats acknowledge all the basic facts and explain exactly how they plan to keep up the gains of Trump’s economy while implementing their own political agenda, people will listen. Otherwise it’s just noise.
9
I would like to see the Phillips Curve with the Chinese, Indian and African working age populations included. Mr. Irwin should calculate the cost of his shirts, shoes, ties (even including the Trump brand if he has some) and iPhone under the assumption that there was no Chinese contribution. Phillips Curve is still good but it now applies to the global workforce, not just American.
So, now Trump thinks that the Chinese have been stealing from us and he is going to right the ship. If he really follows through instead of just a name change as he did with NAFTA, we will see the Phillips Curve - the American, not global version - back with a vengeance.
3
You do realize that the Chinese government sponsors intellectual property theft operations? Trump isn’t wrong about that and most American firms would agree.
1
This article doesn't mention what kinds of jobs increased. Was it in manufacturing? No, only 4,000 jobs there. Was it mining and logging? No, there a net loss of 3,000 jobs. The big winners were professional and business services (+76,000), and education and health services (+62,000). They account for more than half of the total increase. Also showing a good increase was construction (+33,000), but little or none of it residential. I suppose a job is a job. Still, increases in these areas seem like gains fot specialists of various kinds, not your average working person.
3
@Jeff your idea of the “average working person” seems to be somebody with no education, no ambition, and no brains. Yes, the economy now demands people with specialized skills. Hello? This has been going on for at least a hundred years. Let “the average worker” educate themselves and acquire the skills necessary in modern economy.
2
My take: the unemployment and underemployment rates are understated, because those unemployed for over a year drop off the rolls and because so many are making ends meet by working part-time jobs at relatively low rates of pay.
This would explain low inflation and wage growth in the face of booming employment.
Yes, the economy has improved dramatically, but not as much as the headline numbers suggest.
7
Why is opiate epidemic not playing role here? Happy for the numbers but is this a true data or falsified from confounding variables?
2
This is what happens if ALL of the country gets to be part of the growth. Under Obama, Deep Blue states grew, and purple and red states were stagnant. Blue State economists and Blue state politicians said that is "the new reality" and we had to live with it.
Under Trump, EVERY part of the country is growing ... Blue, purple and Red. That means more growth for everyone.
The Blue State economists and Blue State Politicans were probably right ... if policies make it so that only the Blue parts of the country grow, then growth is limited and you can't sustain this ... BUT if the whole country is involved and the whole country is growing, then you can sustain it.
8
@Xenon How can you possibly implement a policy that only applies to blue states?
Sounds like right wing media projection to me re: salt deductions applicable to wealthy, blue states.
You know, divert attention by accusing your opponent of your own misdeeds.
1
Most average working Americans spend more than they earn. So you increase their wage by $20 a week. All that does is slow the rate they're going into debt. They're still going into debt. Makes no difference at all.
3
I'm interested in the "....1.9 million Americans would not be working who are instead gainfully employed. "
Exactly what do those jobs look like? Are they full time with a liveable wage and associated entitlements?
4
@Concerned Citizen Obama's economy had all the part time low paying jobs. Trump's economy has very good blue collar jobs.
1
Sounds like Neil has come around to backing Trump's positions. Rate increases were a bad idea and maybe cuts are not such a wacky idea after all.
4
MMT told us it was possible and, in a way, we are practicing MMT right now.
Sorry, see zero signs of booming jobs. Looks like recession is nearing as Temp hiring and Household hiring has dropped noticeably. Classic inventory recession. April will reverse in May as the usual seasonal distortions unwind. This is is classic seasonality Neil. You need to stop looking at the NFP, which is the laggiest of all the employment indicators.
I would then take out 50,000 a month this cycle which are nothing more than retirement replacements. Doesn't look so good then. This is the problem with BLS data. It wasn't built for a decaying labor force. By the mid-2020's it should regain some value as the decay in the labor force stops and retirements plunge.
3
I don’t know where this greatness is. But i do know these reports are useless when we have over half a million homeless people in the United States, when mortality and life expectancy rates continue to erode, when potentially over 20 million will lose their health insurance, when anti-semitism and hare crimes are on the rise, when our roads, trains, dams, electric grids are collapsing, when public education has become chartered education, when our social security is always at the cutting block of the Republican party. Yes, people are working, paying taxes, living but it doesn’t mean, we, as society, are looking good.
8
American workers have felt the downside of globalization for 30 years but now are seeing the benefits. Globalization may have killed inflation as we know it, and that allows the Fed to continue an easy-money policy much farther into an economic expansion than would have been possible 20 years ago. With inflation under 2 percent, the Fed doesn't have to spoil the party.
Hardly any player in any manufacturing industry has the ability to raise prices because competitors domestic or overseas will grab market share. Fracking has greatly lowered the price of all forms of energy.
Even food -- which is mostly produced domestically for a domestic market -- is subject to international price pressures now because the cost of air-shipping has gone down so much. E-commerce makes it so much easier for lower-cost suppliers to reach consumers.
And the velocity of market adjustments is incredibly fast -- price cuts or price increases produce instant impact on market share. It's just not your father's economy, and it's nothing like the economy discussed in undergradute microeconomics courses.
5
It many Americans need two to three jobs to pay their rent. As long as the economy is “booming” I guess that doesn’t matter.
1
US gov't debt is larger than GDP and growing faster than GDP. How long can that continue? Add corporate and person debt and you have to wonder how this can possibly end well. Let's also add that the FED can't normalize interest rates or sell any of the assets it purchased to mitigate the great recession without crashing the stock market. How does this qualify as a strong economy?
5
On the surface it's one thing, but in my work folks quietly fear the the "other shoe dropping". Business is good, but off to the side, we discuss and recall a similar feeling as the summer of 2008 when things were booming, it was challenging to hire, cranes were everywhere on the landscape, and the news media was singing the praises of another unimaginable boom, and in fact the other shoe was soon to drop. What few tools are left for the Fed, and what unchartered territory we and our loosely connected allies are in globally give many of us pause, and reason to caution any celebration.
11
Deregulation, especially when it comes to the environment, will prove to be very harmful. The huge deficits caused by Trump's massive tax cuts for the wealthiest, will also come back to haunt us.
7
An interesting column, given Paul Krugman's dire predictions over the past couple of years. He may have a point when he talks politics and environment... economy-wise, he has been wrong on pretty much everything.
The problem, in my view, is that we have reached the ceiling where further growth is difficult without major gains in productivity. Which are unlikely to happen without systemic changes, such as decreasing student debt, and progressive taxation.
3
The answer to the mystery (of growth without inflation) is contained in the one word the article never mentions: productivity.
Productivity has been growing at 2%+ since 2016. A 2% productivity growth rate plus the usual 1% population increase = 3% GDP growth without inflation. It's pretty simple, really.
The so-called "Phillips Curve" has been irrelevant since the 70's when the simultaneous existence of high unemployment and high inflation showed that it was fallacious.
3
Nice point, though the word "productivity" is mentioned, in paragraph 14
1
The source of the boom is no mystery - plain old stimulus seen in the budget deficit as percentage of GDP (see table below). I'm not against stimulus spending per se (it's all paper money right?), but I think a distinction needs to be made between instantaneous consumer well being and long term US strategic economic well being. One indication of how that is going the 10% junp in the trade deficit in the past year alone (see table below)
% of GDP millions
year budget deficit trade deficit
2015 2.4 -745,483.0
2016 3.2 -736,576.6
2017 3.5 -795,689.8
2018 3.9 -878,700.9
Ideally, the abundance of money would lead to investment in US mid and high manufacturing exports, but the high dollar has poisoned US competitiveness instead. 10 years down the road, lost US share of manf. exports will have more effect than the temporary buzz of the current boom.
2
The "so-called" liberal media is sure caving in on this idea that Trump has created this great economy. In fact, Obama had a 140% market growth in his 8 years, or 17.5% per year. In Trump's first two years he's only grown about 18%, or about 9% per year. Half of Obama's market growth rate. Why aren't we talking about this more? Unemployment rate drop has also been slowing under Trump (but it has to as we approach zero - but GOP would let that get in the way of bragging about it). GDP, Trump has yet to come close to Obama's top three quarters. Where are you"liberal media"?
8
The supposedly great job market and low inflation is a total mirage. Low unemployment does not equate with employment offering true access to the middle class. Inflation numbers conjured by the Fed are not representative of massively inaccessible health care and unaffordable housing. Why keep feeding the public this hoax if it is not applicable to real lives?
7
Now juxtapose these numbers with the rising cost of healthcare - higher premiums, higher prescription drug prices, higher copays, etc.
8
The economy is great for some people but not for others. The tax cuts of 2017, along with wage stagnation, are too small for the majority of the population to push inflation. Lots of jobs with paltry benefits that pay low to moderate wages. I'd hazard to guess that most of that tax cut money is getting rolled back into the stock market -- great for those who own stocks, but irrelevant for those who don't.
The unemployment rate is not a fair reflection of what's really going on. It wasn't a fair reflection under Obama and it's not fair under Trump. It doesn't count discouraged workers who quit looking -- lots of whom are over 50 years old.
8
Ahem, Money invested in stocks provides the capital to build factories, stock them with tools, and provide operating cash. That helps create jobs.
3
The public do not feel happiness by economic numbers. Equality or fairness is much more important than economic data. The public get angry because they cannot earn enough money to educate their children at college by hard work though some people get huge money by soft jobs.
8
Jobs are one measure certainly.
Jobs offering family supporting wages are quite another.
Unfortunately, the latter is not measured.
7
I am very interested to know how many older workers have been employed. The Kaufman Foundation conducted research that showed that the majority of workers over 50 were being pushed out of their jobs and then not finding another one.
11
Low inflation means moderate demand that does not raise prices. The economy still has some growing before it’s actually pushing demand to the maximum.
2
why inflation is still low? i think its because of US shale oil booming that keep oil price in check. Something that not happen on last time.
6
Half of what we consume us u regions where labor cost are not an issue. I wonder what the inflation rate is services s in this country. People forget bout 15-20 years ago the changed the way they calculated cost if living and since then it has been very low. I don't about others but to me it seems the cost of services are skyrocketing. Cost of healthcare has doubled in a decade are premiums and drug cost part of the equation? I suspect most Americans would laugh if you told them the cost of living was less than 2% last year.
3
My son and his fiance have undergraduate degrees in biology masters degrees in zoology and animal behavior. They both work at a major Florida aquatic park for under $20 an hour. They have been looking for decent work it the area between Baltimore and North Carolina for two years and cannot find it.
Their search has been for virtually everything reasonably within their skill set. Between the two they have had one interview. If the economy is roaring as Trump would want everyone to believe, why can't they even get a call?
18
@John
The economy is roaring in many fields, but not all fields. It appears your son and his fiance have degrees in fields that do not have a substantial number of jobs.
Both Federal and State governments have jobs that might be great for the two of them - in parks in the area where they want to live.
7
@John. And what were they planning to do with those degrees? Usually biology majors teach or go to med school.
2
@John
I have a masters in Zoology. I work in software design. My academic interest are in the life sciences but software design, which I also enjoy, pays the bills. I also work with several other software designers who were Biology Majors with Masters Degrees. Explore other options.
3
I'm concerned that the CPI shopping basket underweights the cost of health care and education. Some goods like TVs and apparel have become cheaper over time, but they are relatively discretionary compared to education and certainly health care. The cost of health care and education has greatly exceeded wage growth. If health care, education, child care, and elder care were properly weighted in the CPI, I'm guessing that inflation would actually be much higher.
10
Neither healthcare nor an education in a US university has any foreign competition to encourage efficiency and lower costs.
1
@Esme Anne I agree. Years ago they removed things like food and fuel because they were too volatile. Nowadays Services are a huge part of everyone expenses. How are they factored it. Over the last two years the price I pay for a haircut went up 2 dollars which was a lot more than 4% My health insurance don't ask. I do believe manufactures good are cheaper due to automation and foreign labor but service seem to be climbing and far more than 2% a year.
1
The generational shift in the economy that explains this situation is the shrinking share of national income going to labor. In the glorious post-WWII years, the share of national income going to employees was in the 62-66% range. Since the Great Recession, it's down to 56-58%. With approximately 8% less of the income share, rising wages are a smaller factor in generating inflation. Corporations are retaining those earnings, or paying them out to stockholders, many of whom will keep the money invested instead of spending.
Net result: Many employed workers, but they don't have the spending power they used to, so inflation stays low.
Source: https://www.bls.gov/opub/mlr/2017/article/estimating-the-us-labor-share.htm
8
The only magic is that economists seem to believe that Trump and the Republicans have created an economic miracle. In fact, all they have done is pour gasoline on a smoldering fire. Our economy was slowly, steadily recovering from the Bush recession of 2008. When Trump and the Republicans drove 1.2 trillion dollars in tax cuts into that economy, the cash simply explodes the value of stocks. There is no increase in actual value or actual performance. Reality will catch up with it soon. We are witnessing a huge market bubble that will collapse once the reality of the actual value of companies and their profits sets in. I think it will happen soon. Our government cannot sustain the cuts, nor can out future sustain the debt we are building.
14
@Patrick Stevens. And Krugman predicted the market would collapse when Trump,became president.
3
@Jackson P.S hE S still in office. Everyone thought the economy was fine in 2008 until it wasn't.
1
"Booming jobs" is what those who don't bother to dig deeper keep repeating.
The truth is, the 1% /CEOs are doing well. The majority needs to keep 2 jobs to stay ahead, to pay the bills, to pay for education and healthcare. Everyone I know is working 2 jobs - including the kids.
Try digging deeper into how WE are doing, not just the faceless "economy".
19
@Diane your experience doesn’t align with the data in the report. Wages are rising and more people are gainfully employed.
12
@Stefan
Most people's (not just my) experience is not mutually exclusive of the data. Wages are not rising for most workers - only for the top 1%. More people employed does not mean they are making enough money at one job to make ends meet, either.
9
@Stefan: Health care and education costs are rising much more steeply than wages and they're not included in Irwin's story.
4
Anyone who has bought groceries or paid rent knows that inflation is not 1.6%. It appears to be more on the order of 5% per annum.
The difference is that the statisticians adjust actual inflation numbers. For example, they adjust for technological improvements, but that $300 phone that now costs $500 is still 67% more expensive and we don’t really have the option anymore of buying the cheaper phone (software no longer supported...). And we don’t actually use all of the technology that supposedly justifies the price increase.
They don’t adjust for “user pay” charges. So an airline that now charges for bags can add 10% to the cost of the ticket, which is no lower in price. This charge adds to GDP but not to inflation. Your insurance deductible going from $1000 to $2000 is not reflected in inflation. They assume that when an item goes up in price, consumers switch to alternatives, failing to reflect that alternatives are limited. Because petrol goes up, not all consumers have access to efficient public transport to allow them to switch from the car to the train. We don’t have full information that allows us to switch from more expensive medication to cheaper ones.
All well and good in theory but not reflective of inflation in the real world.
12
@RAD61 My electricity rate stays the same but the monthly line fee more that doubled in the last few years. How does that get factored into inflation.
1
Please, no more stories about the "booming" job market. Just ask anyone over 50, even those with in-demand university degrees and extensive documentation of their value. Or ask alumni of US multi-nationals, who have seen global earnings pressures lead to job cuts in the US because of "at will" employment laws here. Ask anyone who has applied for jobs beneath their expertise level and been discarded at the outset for not being the "right fit." Better yet, commission a web scrape to see how many of those new jobs are internships, contract employment, or part-time. Also, do a web scrape to find out how many of those jobs stipulate 5-8 years experience. That means, "no more than 8 years." The job market is "tight" only in a few specific business silos.
304
@Charlie ANYONE, whether 50+ or alumni of Multi-Nationals, who have kept their skill set current can get a good job in today's economy. EVERY employer I know of is having a devil of a time finding qualified people. If you can't find a job in this economy either you have exaggerated expectations based on your resume and skills, or you are not motivated. This is about as good as it gets. Sorry to offend, but if you can't find a good job in this market something is wrong with you. Similarly, if you think that you should be getting more attractive employment opportunities than you are, nothing is preventing you from starting your own business - and it's a great environment to do that, as well.
26
@Eric
You really have no idea what you're talking about. Hiring managers discard evidence of qualifications and achievement in initial screenings. Others refuse to discuss the position after inviting candidates to a formal interview, which is where they can see that the candidate is the "wrong" demographic. While it is true that some segments of the job market are near full employment, most are not. There is much more to the employment landscape than what you personally see.
56
@charlie I’m 57. I’ve stayed current in my field. I get at least 6 inquiries week trying to get me to leave my job, but I’m happy where I am. Age has nothing to do with my opportunities.
20
Another job report that says jobs are "booming". And another job report that fails to provide a detailed explanation of these "booming" jobs. How many of these jobs created pay minimum wage with little or no benefits? How many of these jobs created are in the gig economy that pay little or no benefits? How many of these full-time jobs created pay more than $50,000.00 per year with some or no benefits and that have been filled by people age 40 or over? Many, many people today are still working several jobs just to stay afloat. Many of these gig economy jobs are of limited duration and end on a moment's notice and there is no guarantee as to how soon the next job will start. And age discrimination remains rampant. We need to see a report that shows the true and complete breakdown, by sectors, in exacting detail, of what the job hiring picture in America is. And without any filtering or manipulation. Then we will see whether or not the job market is "booming".
392
@Howard Herman Wages are growing at 3.2%
4
@Howard Herman I'm 3rd party. How is this any different then when Obama claimed an almost 300% jump of which most jobs posted were only part time and many for less then a week? As well as jobs that specifically said not to hire Caucasians, so there would be a spike in minority jobs. This is news from a source bias in favor of Democrats. Take a moment and consider that you don't want it to be good because you don't want to acknowledge the other side may have done something good.
8
Well said.
I agree entirely with your analysis.
Although hiring has improved dramatically over the past five years, conditions aren’t nearly as rosy as the headline jobs numbers suggest.
The monthly BLS data don’t track those who have been unemployed for over a year, nor do they track the quality of jobs created. And while the U6 number tracks those who are working part-time, it doesn’t track the number of those in the “gig economy” whose full-time jobs are inherently unstable and marginally compensated.
8
Economists are inflicting incalculable damage on humanity by viewing the 21st century economic landscape through the lens of the 20th century.
But Irwin falls into the trap himself when he states that increasing productivity will, quite naturally, result in higher wages and living standards, when in fact the "economic law" that links productivity and wages was severed 40 years ago.
And that's one of the reasons Trump is president.
May as well just burn the economics textbooks at this point, although, sadly, an extraordinary amount of damage has already been done.
And we're just beginning to reckon with the consequences.
260
@TB The American people, not the 1%, have elected governments, from Reagan to Trump, who have steadily seen to the destruction of the middle class and the strangling of the American Dream, in service of and to the small number of the wealthiest among us. The responsibility for this crushing income disparity lies at the feet of those many millions of average Americans who voted for this tragedy yet complain about it every day.
31
@TB...yes the link of productivity to wages was severed.
Actually, the media needs to explain the contrast of past generations when the link was strong, with wages/benefits rising, strong unions with 1/3 of workers in them, and non union workers benefited from this. More consumer demand, rising middle class, and business was profitable.
Politicians running for office, and the media need to explain how this all worked and use it as a role model for policy, to win elections.
13
@Michael
Your post implies that we have a functional democracy, which is absurd.
Those millions of average Americans had no choice, whatsoever, once Bill Clinton abandoned the American middle class for all that "Third Way" nonsense and embraced neo-liberal economics and hyper-globalization. The political parties became virtually indistinguishable, like Coke and Pepsi.
President Obama had an opportunity to get America back on track, but he squandered his historic mandate for change by listening to economists like Larry Summers. History will be devastating to him.
The destruction of the middle class was a bi-partisan effort.
22
Unemployment may be low, but jobs that include benefits such as health insurance and sick leave are in short supply and the Trump administration's most recent finding that "gig" employees are contractors and not employees is certainly not going to help that. It boggles the mind that Republicans rage that the ACA would hurt employer-based health insurance when such a thing is virtually non-existent for many. The U.S. job market may be hot, but many are still working two and three jobs just to survive. That's not a great economy by any reasonable definition.
481
@Nina RT Unfortunately I worked enough hours last year to be eligible as a part-timer for my workplace's/union's insurance plan. (I need to keep hours at a certain minimum for reasons of Social Security) Ugh, to be plunged from the sane civilized world of my ACA insurance into Blue Cross/Blue Shield. I'll be paying much more for medical bills. And of course I'm immediately awash in privacy and disclosure policies to agree to; that is, I'm suddenly swimming in corporate private American insurance's pool.
18
Excellent informed comment. Readers please note the hours mentioned above.
7
@Concerned Citizen I thought this was incorrect - work just one hour in a week, and you're "employed?" Couldn't be - that's crazy!
I was wrong, you are right! Gobsmacked! Sure gives the unemployment report a different hue. Looked up the Bureau of Labor Statistics definition. https://www.bls.gov/cps/cps_htgm.htm#employed
5
Overemployment, stagnant wages, rising costs in housing healthcare and college tuition, shrinking of the middle class amid a massive shift in wealth to an increasingly powerful and corrupt plutocracy, with gains not shared w workers — this is why the Philips curve is outdated. We need a new model for understanding the current economy and for real policy solutions to what most of us are experiencing.
527
@sue denim
Yes but Benjamin Netanyahu, Vladimir Putin and Mohammed bin Salman are still smiling and smirking.
Economics is not science.
Economists are not scientists.
There are too many variables and unknowns to craft the double-blind experimental controlled tests that provide predictable and repeatable results.
There is no Nobel Prize in Economics Science. There is the Swedish National Bank Prize in memory of Alfred Nobel.
Economics is gender, color aka race, ethnicity, national origin, sectarian, politics, history, banking and education plus arithmetic. Fortune telling, sooth saying, sorcery, witchcraft and voodoo.
17
@sue denim
Yup, those would be some of the main factors.
In France, the squeezed middle class has moved out of the cities and into the rural villages where big properties can be had for small prizes. This was seen as a good thing, revitalising communities that were shrinking and "greying out". However, long commutes were a less attractive consequence. Add to this France's love for toll roads and fuel taxes (not the highest in Europe, that would that happy little Nordic socialist kingdom of the Netherlands) and you have one squeeze too many on the lower middle class. And that is why you see riots in Paris.
12
@sue denim
As a non-economist who studies cognitive errors and systemic failures in general, what I think I see looking at economy is a constantly evolving system which economy’s are always only understanding looking in the rear view mirror. By the time they construct and tweak a model, it is already obsolete. They can understand the past pretty well but the present always surprises.
6
I suppose this is anecdotal, but if inflation is so low, why am I paying so much more now than two years ago for grocery items across the board from bread to beef to bacon to beer?
Then there is the cost of gas and medical expenses.
Utilities have gone up.
And how do we factor in all the car repairs and new tires because the roads are in such awful shape?
Anyone else experiencing this, or is it just my imagination?
793
@D.A.Oh
Very nicely stated. There is clearly some serious disconnect between what many if not most of us are experiencing and how it is being talked about here and elsewhere. Brings me back more than a couple of decades.
During the Clinton presidency almost all my friends were experiencing very hard economic times. It was so weird reading how much better things were when they were so bad for so many of the people I knew. So much so that people actually had to borrow money from me. Which given my own financial situation at the time was beyond comical if it weren't so serious.
47
@D.A.Oh not your imagination... my wages have been basically stagnant since 2008. my yearly "raises' have been barely 1% which does not cover the increase in my share of medical insurance, nor does it increase my 401K and the firm's contribution to it... my grocery and utility bills keep rising to the point where i can no longer afford to have cable. and i work in what is considered a well-paid profession of secretary (or personal assistant). thankfully, i don't have a car, and never bought a house. i didn't fall for that "middle class" trap. "there's nothing surer; the rich get rich and the poor get poorer" and in the meantime, the ladder to rise to the middle class keeps getting pulled out of reach, rung by rung.
161
@D.A.Oh It's definitely not your imagination. I just came off a 5 year pay freeze two years ago and have gotten a whooping 1% raise since then. My medical costs keep going up (even with employer provided insurance), groceries keep rising, gas prices are now rising, and we just found out here in MI today that our electric bills will be increasing almost 9% for residential users while it's only going up 2% for industrial users and 4% for commercial customers. Yeah, great economy for the 1%.
142
Why is every media outlet so positive about the numbers that were released about the labor market and the GDP last week?
This is propaganda if I ever saw it.
None of these numbers reflects what is actually going on in cities, villages, suburbs, and farms in America.
The numbers are contrived and intended to make Trump look good and that's all there is to it.
13
The planet is dying and we’re happy about what, exactly?
5
Both the unemployment numbers and inflation index are deeply flawed metrics. Inflation in particular is so flawed that we shouldn’t use it.
Inflation only measures the prices of consumer goods. (Consumer price index) It doesn’t take into account the costs of three necessities: housing, healthcare and education.
My house cost me over $500,000. Two years prior it sold for $420,000. Don’t give me that lie that inflation is low.
18
@Zachariah House prices are not calculated into cost of living. they are too volatile.
1
Maybe those new jobs are going to people who are already in the workforce but who can't get by on one job. Maybe they're going to the people who had stopped looking for work and were therefore no longer counted in the unemployment statistics. Maybe the wage increases are really more like corrections for the last 40 years of wage stagnation, coupled with states' increasing the minimum wage.
Meanwhile, healthcare, education, and housing are all cripplingly expensive and only becoming moreso. Maybe the economists think things are fine, but it seems like millions of people disagree.
3
I find it crazy that all the debates about the Fed’s rates are purely in terms of growth vs inflation: whether we want more growth or are more preoccupied by keeping inflation under lid.
There is a fundamental dimension of interest rate policy that is very rarely mentioned: decreasing rates increases the value of financial assets. Which includes properties (and hence housing) in many markets where they behave like financial assets (most big cities notably).
When you decrease rates, you make owners of capital richer. But you also make those who need to buy capital (notably young people who need to buy a house some day and save for retirement) poorer, because they have to pay more for the same thing.
There is clearly a question of fairness (alongside growth and inflation) here: do we favor one or the other side of the capital ownership spectrum. This is completely ignored. It might be better to be in a society with less growth if it is fairer.
The fairness question might even matter just for economic reasons, if unequal societies are less efficient. If young people are getting it too bad, it might bring some economic woes too.
2
The wage increases seem to be more like real estate these days, it is all local and varies widely from place to place. Second, the wages for the bottom 50% do not appear to be rising by multiple data sources.
4
Apparently, the information age and information products have changed economics. Is there really any unemployment when self employment is now so prevalent. One can drive for uber or deliver for Amazon or do loads of contract work for businesses. The terms of employment may not be great but I think our new ubiquitous communication systems expands both markets for good and services as well as demand for all kinds of labor. The existing economic models simply aren't designed to monetize new information age products or the elasticity of demand that can move very quickly in any direction.
1
A key number being touted by Republicans is the lowest unemployment rate since 1969.
But Nixon wasn't remembered for that historical economic data, was he?
6
I love how all the complaints the left makes now also existed when Obama was president. And all the critiques the right and Trump has with our economy under Obama are forgotten. Take for example: Those who dropped out of the labor market.
Such is the nature of our political discourse.
6
@David And the right complained incessantly. Have you forgotten?
1
Please. When the stock market was going up Trump almost acted as if he was wholly responsible for its rise since early 2009 when, in fact, Obama was running this show. Once the market started slipping during his watch, Trump did not say a word.
1
@GUANNA
That's my entire simple point: The right complained about people dropping out of the labor market. Now the left is. I'm post-partisan at this point -- I'm more interested in pursuit of some semblance of rational truth. It ain't easy.
I wasn't a fan of Trump taking full credit of the economy right off the bat. But after 2-3 years of sustained growth recently and some fantastic economic numbers lately (3.2% growth in the first quarter this year), one has to say, "Well, he hasn't messed it up."
I have a feeling if stable economic growth continued in Trump's second term, the left would still say, "This is Obama's economy."
1
I can't believe I have to inform this writer about it, but it's very obvious. The labor force participation rate is still 4 points below where it was in 2007. The "official" unemployment numbers are never the full picture. On top of that, the US lost over 10% of GDP in 2008-9, and then languished at a 2% average growth rate until 2018. There has never been a recovery from 2008, and a lot of people are still on the sidelines. The economy has a lot of slack left, and a lot of ground to make up. It has only begun to return to the average of 3.5% growth between the end of WWII and 2008. In order to truly recover from the last decade, it needs to grow faster than that.
9
Among this good news.. blue collar employees written off, thrown under the bus by previous administrations identity politics "jobs that are never coming back" are back in record numbers at record wages. $ billion investment in Pennsylvania steel production.. Trump was right again.
4
When everybody agrees that the economy can't fail, it does.
5
Everyone can have a job for a dollar an hour, no benefits, no bathroom breaks, and no worker safety.
GOP nirvana!
18
Wages were low and stagnant for mostly service jobs that were added during Obama’s “recovery”... its only been since the Republican tax bill was passed that substantial jobs have been added to economy with increases is salary.
1
@David Henry
Koch-Republican goals:
1. Eliminate job-killing regulations. Get rid of safety regulations that let workers have a job that won't kill them. There are plenty more workers that cost us far less than those pesky regulations.
2. Eliminate Unions. Get rid of any structure giving employees wage bargaining parity with the employer.
3. Eliminate Minimum Wage. Get rid of laws that reduce my profits.
4. Eliminate Taxes on the Wealthy. I hire the best tutors for my children; I don't care how the masses educate themselves nor should I pay for it. It's my money.
5. School Vouchers. Get enough people to opt out of public schools, so we can close them. I don't care how the masses educate themselves nor should I pay for it. It's my money.
1
My training is medicine but even those untrained in economics might imagine a few dark clouds rising and perhaps a drop or two of rain on this sunshiny parade when considering a $20 trillion debt on the credit card, adding $1 trillion annually.
I can tell you that when sick patients are initially treated with high dose steroids and morphine they feel so good, for a while.
But eventually all the endorphins wear off and the grim reaper will exact his due.
"The old...rules of thumb no longer apply" only in the imaginary world of Dr. Irwin.
A steroid economy feels good now but common walking around sense warns of a day of reckoning.
10
Um, thank you, President Obama?
10
What kind of jobs are we talking about? When the recovery started happens under Obama there was a lot of noise about how many of those jobs were “gig” like Uber drivers. I’m surprised that a source like the NYT would take these numbers at face value.
5
Is it possible that there is a connection between low inflation and the waves of illegal migrants flowing into the United States? If illegal workers are accepting jobs at lower wages than legal residents it would put a damper on inflation.
3
A low unemployment rate is great news to hear. However, there are several other factors that are involved in an economy that works for everyone. It’s also very important that everyone (including those with pre-existing conditions) have access to health insurance and have affordable healthcare that will cover their necessary healthcare needs.
Trump recently pledged to get rid of Obamacare entirely. I fully support that if he will replace it with something better. However, I’m not confident that he will replace it with something better.
2
Articles like this are useless for reckoning on the standard of living of the working class.
It fails to account for the low labor force participation rate, down to 1980 levels at just 62.5% ( it was 67% in 1999-2000), as well as the fact that wages are stagnant and families are mostly two-person earners.
The number of jobs by itself indicates little.
14
@Jerry Engelbach
Spot on. "The number of jobs by itself indicates little".
It's the amount of wealth that we have that makes a difference, and most of its going to the wealthy over the past 30 years.
6
Labor participation rates have also increased.
1
this is not true. the facts if you care to look them up and not make them up show that the majority of this wage growth is in fact going to the low to middle wages
1
Funny what happens in a lower tax & regulation environment. I'll just remind all the Trump haters that they insisted this would never happen under Trump. GDP growth would never get to 3% again and 2% was the 'new normal'. Manufacturing would never stage any kind of comeback. Energy independence could never be achieved. All of these liberal predictions and more have been flatly proved wrong over the past 30 months.
11
Suddenly, deficits don’t matter?
1
@once from Rome you have hit the nail on the head and reading some of these above comments shows that a good amount of the liberals still would rather see Trump fail over America succeeding
1
@Once From Rome.
Except that these weren’t “liberal” predictions— they were Republican orthodoxy as well. Energy independence has nothing whatsoever to do with Trump, and would be the same if we ended wellhead flame-off and stopped pretending that coal should, or could, make a filthy comeback to poison another generation of miners and accelerate the defacement of ancient Rome with acid rain.
1
Low jobless is always good news..
But, it doesn't seem to be an exclusively American phenomenon. Unemployment in the European Union is at an historic low. The last time the jobless figures in the UK were 'this good' was 1974.
How many of the 'new' US openings are high pay, high quality jobs? And how many are the minimum part-time, zero-hours, minimum wage, types beloved of modern sweatshops that don't want (and currently don't need) to automate?
There are jobs. Then there are jobs..
29
What do the jobs pay, and what are the benefits?
Big boom in digital economy! Really!?
PBS reported 5/02/19 that Uber drivers wages range from around $8.50 to $11 per hour. No benefits.
Gosh, someone must be making money if the economy is good for all Americans.
Of course, maybe the use of contract employee drivers as an example of the economy’s greatness is not apropos?
9
Putting it simply, economics, especially macro-economics, is not science, despite various institutions and individuals which like to claim it is, a relic of the '50s and '60s attitudes, when science was held in very high regard in this country.
The methodology of developing economic statistics needs to be examined closely and done so in context. For instance, I see no indication that economists, at least as far as "conclusions" go, factor in the demographic changes, especially that a far greater percentage of women are in the workforce and, thus, family statistics are now based on two wage-earners rather than one.
Also, though they take the credit for good news and shun responsibility for the bad news, Presidents have relatively little power to affect the economy past the day's headlines and the momentary activity of stock market traders (as opposed to market investors.)
4
The economy is improving? For whom? Tell that to the 140 million Americans that the Rev. Dr. William Barber has identified for his Poor People;s Campaign! Are these McJobs or are they family wage jobs?
13
@Linda McKim-Bell Yep! Those of us slaving to these exploitative jobs know exactly what they are.
1
And the reason again, Mr Trump, for wanting to lower interest rates?
1
So many commenters here will never be happy about anything that can be remotely connected to Trump. People, this is good news for our country! No need to be so negative all the time. Try smiling. It feels good.
13
@Ryan
Try examining all the facts, not just the raw unemployment figures.
And go out and see how hard people have to work and how much debt they have.
BTW, unemployment has little to do with presidents. But the extreme inequality between the rich and the rest has a lot to do with the political party in power.
6
Lots of jobs. In fact some people have three at a time!
4
Uh this guy is 2 years in. The last guy had 8 years just what party are you blaming for the disparity???
2
It’s not complex - it’s simple - look at our exploding national debt. Robbing Peter/future to pay Paul/present.
7
What a great country !!
You can now get as many jobs as you want.
They don’t pay anything, but the opportunities are endless !!
26
@Grove RIGHT?! Lol!! This economy and research is a disgusting farce for workers!!
1
I fear there is more smoke and mirrors than evident on the surface. Families continue to struggle. Wages remain low historically. The surging deficit ballooning our already nearly unmanageable debt will begin to take a harsh toll. Farm bankruptcies are up. Two and three job age earners are masking the problem. Are they being counted multiple times?
We Americans have a bad habit of focusing only on today. My children and grandchildren should not be forced to pay for today's party. I remain skeptical of a long term expansion, and fear a harsh end to it. I hope I'm wrong. I am a real estate broker in rural America. We are struggling. I see no evidence of a flourishing economy, no evidence of abundance here. I am concerned. I do hope to be proved wrong, but fear I'm not.
8
Regarding inflation I think China and the internet made everything so competitive that kept prices from rising.
3
The concentration of wealth among the top few percent has never been higher. This so called booming economy is a boom in low paid jobs financed by tax cuts for billionaires which is resulting in more than doubling the deficit to over $1T and record trade deficits which must be financed.
Enjoy this temporary boom while you can, the increasing debt will have to be financed.
5
I’m sure Obama’s followers probably believe he should be given credit for the sky being blue!
He was a great orator but an average president. His receiving the Noble Prize is beyond a joke.
12
seems like a bit of Schrodinger's economy. the act of measuring it affects what happens next. the article for instance, mentions the Fed pullback as an unexpected event that caused forecasts of recession to miss... but the Fed pulled back precisely because they were seeing a potential recession incoming and wanted to blunt it proactively. who's to say a recession would not have occurred as predicted if the Fed raised rates?
I think concerns about negative consequences of various Trump/Fed issues are precisely why we are still doing okay. if not for the looming trade war that only ever partly materialized, or the interest hikes that only partially occurred, firms may have been more aggressive with their expansions, and perhaps we would be exactly in the predicted recession now, because they over extended.
in my opinion, the Fed is being smart and proactive, and the unexpected benefit of Trump's silliness is that no one is taking too big of a risk while he's in charge. slow and steady growth is winning the race.
2
You can make a case for anything with fake statistics. The actual unemployment rate is about 21%.
1
Perhaps economists forgot to measure how many people are working two jobs to make ends meet
3
It’s a great economy, if you’re rich...
7
Sadly, the data doesn’t back up maximum lib’s anecdotes. Wage growth has accelerate while price increases have slowed. Wage growth has outpaced inflation, which means purchase power is increasing for the low-wrung worker.
That’s the data.
3
@Memnon
Wage growth for the average worker remains pretty stable — meaning little or none.
Whereas prices, however slowly, are increasing.
1
If economics was an actual science with repeatable results don’t you think the recession would have never happened? Wouldn’t we just use the same methods to keep everything peachy? Everything would have an exact cause and the solutions to all economic problems would be obvious. It’s as much a science as political science only you have to take calculus. Economists like to think they are Nostradamus but in reality a broken clock is right twice a day is a little more accurate. They only serve to give talking points and ammo to their own political camp.
1
We are running 1 trillion dollar annual deficits. That is a form of QE. This “stimulus” of new capital is fueling much of our expansion. In addition Ultra low interest rates are leading to ever more aggressive credit and investment decisions as savers reach for yield/return. I am grateful for this market but preparing for the inevitable backside.
5
Frankly, rural America does not show this to be true at all. I do not trust the numbers from this administration and do believe they will lie about them in an attempt to keep selves in power.
8
Do you think for 5 seconds that Donald Trump understands any of this? Further, do you believe that the minions that Trump has put in place will tell the truth? How is it in this great economy that there are so many more homeless? How is it that people cannot afford houses? I humbly suggest that this is all a house of cards that will be falling down sooner rather than later.
12
Oh really, government reports are just that.
2
Within my lifetime, every time economists claimed the old rules don't apply to this "new economy," we ended up in a crash. Hold on tight.....
4
It’s coming.
The stock peaked three times in an irrational manner in my adult life time 1987, 2000 and 2008.
It was all good til it wasn’t
With 22 trillion in federal debt, 1.4 trillion in student loans, 1.2 trillion in credit cards and every state out cash. America is leverage to the hilt. Remove one brick and bang, 2008 all over again
13
Thanks AGAIN, President Obama!
5
Until the recession.... then its Trumps economy. Man you love to have your cake and eat it too.
1
@P L No, that'll be just about right.
1
In other words, Trump was right - again.
6
Are these numbers correct? In 1969 most women and minorities were not part of the workforce, how were they counted 50 years ago.
The numbers sound great but are they skewed as white men made up the majority of the work force in our factories,mills and mines.
If DT did not believe the stats under President Obama,why should we believe these stats.
Looking for well thought out responses hopefully from economist
1
Because of the tax cut, most businesses now retain 23% more earnings than they did before, 79 cents instead of 65 cents of every dollar of profit. As a result, there are more jobs. Because of immigration enforcement, the job market is tightening up, too. Good news if you like things like food, housing and jobs. Bad news if you are invested in the government’s dominance over the people, or, perhaps, if you are a professional complainer.
4
@rjs7777
There is no direct cause and effect between business earnings and jobs.
What comes between them is demand. Businesses hire when demand increases. There is no other reason.
Low taxes just means that businesses increase their dividends and/or buy back their own stack.
1
@Jerry Engelbach I mostly disagree. Every project in corporate finance is sized in terms of net income after taxes. That is why people are hired in the first place, because a project has been approved where net income justifies the size of the investment. If net income is smaller, the correct size of investment and hiring decreases.
1
I'm not sure all the jobs are living wage jobs so people are still suffering in this economy while the rich get richer. I noticed this weekend when I was in the NE at a hotel. One hotel worker was there at 7:30 am and still there at 9:00 pm and the next morning she was there again at 7:30 am. Another hotel worker was working two shifts 7 am - 11 pm and then back the next day. And at a 5:45 am checkout the desk clerk was a detective working the night shift at the hotel. So people are working long and hard just to make it so its not so impressive the booming jobs if they don't pay enough for workers to be able to work a shift or not take a second job.
4
@Karen
If there was no jobs boom, and unemployment crept back up the last two years, meaning those hotel employees would still be job searching instead of working, you’d be praising the economy, then...right?
1
Jobs are booming alright! I've got two! And if I pick up a third one I'll almost bring home enough pay to make up for the microscopic raises I sometimes nearly get! Yay!
15
The link to the "April Employment Numbers" goes straight to the Labor Department. The Labor Department is a cabinet level entity under the Executive Branch of government. That means the numbers are provided by the Trump presidency.
Someone please explain to me how it can be known the information being provided about the economy and the number of jobs is truthful?
How can it be known that the numbers aren't simply another lie from the current administration?
7
@Vanessa Hall On that note, I am reminded of a class I took in Psychology where the professor said: "Figures don't lie but liars do"
3
The Bureau of Labor Statistics collects and publishes the data. It is intentionally removed from political influence and is a highly bureaucratic organization. “Cooking the books” is illegal.
1
I retired in May 2006 with
a small pension and
a lump sum in an IRA.
.
There has been NO increase in the pension.
Meanwhile the I-Bonds I bought in 2005
tell me that inflation is 60% since that time.
14
"The breakdown of the old guidelines suggests that policymakers need to avoid overreliance on them, and to stay broad-minded to the full range of economic possibilities. Maybe using data from a few decades in the middle of the 20th century to set policy in the 21st isn’t actually a good idea."
Why did a high cost of labor in England help to usher in the industrial revolution?
Why is our current rate of productivity growth so low?
If unemployment is at or near zero and wages outpace inflation then should we fear AI making us more productive?
Will AI replace everyone's job or is there a comparative advantage that will put everything AI related into a small industry that has the smallest opportunity cost?
What is the lump of labor fallacy and how does it contradict natural unemployment?
What happens when a country with high inflation uses another country's currency that has lower inflation as a store of value?
Should we expect the original country to have even lower inflation leading to more currency substitution?
How does fractional reserve banking work when it is illegal to deposit and use a foreign currency in the banking system?
How do we get the natural rate of unemployment to zero without inflation reverting it to the mean rate?
http://i.imgur.com/7pNxR2x.gif
1
You don't believe the positive economic news of the day? That's OK; just read some articles by a variety of economists and choose the news you like. You can't explain what's going on with respect to employment, wages, productivity, inflation? It doesn't matter; there will always be an economist with a different set of data to provide any explanation you prefer. Although it can be dressed up with all kinds of fancy equations and graphs, economics should not be viewed as a science that has any explanatory or predictive value. Sorry; I believe that economists mostly mean well, but the field is just too complicated by unpredictable human foibles.
4
@John
Economic forecasts may be questionable, but current figures don't depend upon economists.
Of course, what is missing from this particular figure — the unemployment percentage — are the number of jobs a family has to have in order to make ends meet, and the low labor participation rate.
1
"The Economy That Wasn’t Supposed to Happen: Booming Jobs, Low Inflation"
The NYT almost sounds apologetic.
But I was really waiting for Professor Krugman's latest column. Perhaps he can put a "resistance" spin on this booming economy.
I know, let's give Obama all the credit!
And no worries. There has to be a recession someday.
Just probably not before 2020 as dreamed by the DNC.
11
@Jubilee133
" There has to be a recession someday. Just probably not before 2020"
Of course. That was the entire point of the tax cut- to artificially juice the economy so the GOP can claim maximum credit for "prosperity" to as many gullible low-information, borderline amnesiac American voters as they can flim-flam. In an effort to ensure that as long as Trump and enough Republicans make it first past the post in 2020, they'll hold on to enough Power to make over Political Reality anew. And when the bills come due, they'll hollow out the public commons, and stick the common people with the rest of the unpaid bill. Calling it big-government failure (while keeping the security state beefed up) and blaming the problem on everyone opposed to their politics.
Unscrupulous cynicism at its worst.
That's why the New Narrative of the 2020 election is currently being sold in big, bold headlines that "It's The Economy." The new drumbeat is now going to be that It's All About The Economy- the Trump GOP will kick everything from environmental safeguards to civil liberties to basic safety net protections for the sick and old to the curb, as long as they can bribe the affluent middle-aged middle class cohort most likely to vote with an instant-gratification consumerism high that they can pass off as "prosperity." For a while.
I'd like to think that American news reporters rare sharp enough to be wary of being massaged into peddling that line. But we'll have to see how that plays out.
1
@DC Reade
You have to be completely cynical about everything to believe that Trump "goosed" the economy just to get re-elected.
If Trump just wanted to get re-elected, he'd play with Dems and agree to a "green new deal" and break the budget for an infrastructure deal which will re-apply onerous business regs and steal Bernie's thunder and proclaim "medicare for all" .
Now, all those progressive programs really, really seek to "goose the economy," by raising taxes for all to a degree never before realized.
What does that have to do with Trump?
Nothing. Now go out and enjoy this great economy while it last, until the Left controls the Treasury.
1
Putting it simply, economics, especially macro-economics, is not science, despite various institutions and individuals which like to claim it is, a relic of the '50s and '60s attitudes, when science was held in very high regard in this country.
The methodology of developing economic statistics needs to be examined closely and done so in context. For instance, I see no indication that economists, at least as far as "conclusions" go, factor in the demographic changes, especially that a far greater percentage of women are in the workforce and, thus, family statistics are now based on two wage-earners rather than one.
Also, though they take the credit for good news and shun responsibility for the bad news, Presidents have relatively little power to affect the economy past the day's headlines and the momentary activity of stock market traders (as opposed to market investors.)
5
I’m not an economist but even a layman observer of economics and someone having familiarity with economics theories, success or fail paradigms can see...
Economies do not improve because of a President alone or tax changes.
Every economist I’ve ever spoken to says, it’s something with multifactorial impact model, a multivariate analysis is required and even then, we are looking to the past for the precedent. And forget that every new era has its only peculiarities.
I’m glad it’s good. And no, it’s not because of Trump some or for that matter, Obama either... it’s our good luck and let’s maintain it. Some alchemy has made it work.
Although no president is the direct cause of it, if an economy is on the up swing, somehow American public is going to give their dues to that person.
3
I forgot to mention...
the shrinking middle class, and the financial burden increase for lower income strata. The %age spilling out of middle class, the majority is going to lower income group.
Those are facts.
And analysis of permanent jobs with health insurance/401k vs. temporary jobs is as essential.
But, I fear everyone is going to look at these claims and when farmers in Midwest are feeling harassed by banks and inclement weather, these headlines will be mocking them.
2
@Ash. Certainly it is multifactorial, but tax policy (fiscal policy) is an important tool used massively By the US. One cannot say 4 trillion spending and 3 trillion intake of taxes should have a small effect. Both of these actions have a significant and global impact yearly, as does the 1 trillion difference between them. It’s not the whole story, but an awful lot of global business rides on what the US government is doing and what it appears it might do in the future. It’s not everything. But it is a lot.
1
Re: Booming (US) jobs, low (US) inflation not supposed to happen
Inflation in the US is now set largely outside the US. And independent of the US employment situation.
E.g. the price of televisions can not increase until the Chinese decide to raise it. Which they won't for many reasons , including that production might shift to Vietnam. I.e. the price of consumer goods subject to global competition is set by GLOBAL unemployment, not US one
Much what American consumes and enters in the inflation reported falls under this category , from vegetables from Mexico, to Buick Envisions to gasoline from S.A.
On the other hand, goods and services shielded from global competition e.g. health care, does have inflation.
E.g. physicians salaries increased 7%, each year, from 2019 to 2018. That is four (!) times the official inflation rate.
Keynesian economics on which the headline was based, was formulated for closed, national economies. It no longer applies
6
Funny how the Government’s model for inflation doesn’t count surging college tuition, health care premiums and Metro North annual fare hikes, among other real life necessities. But at least I can order a bunch of useless stuff on Amazon and get free shipping.
57
So true.
2
@William-And support Amazon as a corporate welfare/taxpayer-subsidized American success!!
In 2018, Amazon reported $11 billion of U.S. income and claimed a federal income tax rebate of $129 million.
"Corporate Tax Avoidance Remains Rampant Under New Tax Law" - 60 Profitable Fortune 500 Companies Avoided All Federal Income Taxes in 2018
https://itep.org/notadime/
1
There are many recriminations directed at economists, rightly so, over that so-called profession's many failures.
Let me add this deserved insult: Not a single economist, groping for where to assign credit, thought to answer this question simply by looking at an old-fashioned clock, as I am right now, & make the necessary inference.
The pendulum swings back and forth, & the amplitude on one side is, you guessed it, the same as on the other. Each drive in a Tessla in the booming economy has its corresponding rides on late night 3 hr. bus commutes for recession counterparts. Each riverfront highrise luxury pad enjoyed by today's grad has its corresponding basement living by the parents scenario in the wake of 2008, or 1991. In a cycle process, the swing in one direction literally powers, through momentum, the swing in the other direction. Each swell living high today has some poor proletarian that had to suffer to make this prosperity possible.
No doubt, today's high earners ensconced in luxury had to work hard: that's the transaction the illusion of "meriticracy" requires. We are a dues-paying society that requires effort to rationalize & justify wealth. But magnitudes & distributions largely depend on timing and this cyclical process. I always say, teach how our meritocracy works by students playing Monopoly (or "Life") with starting disparities matching reality, then record what happens. The pendulum effects confirmed.
Our economy is "moral" (or "fair") like a jungle.
4
wages and benefits have been held down to to the 50 year war against unions. Wages are starting to rise. Inflation will follow.
5
To these economists, inflation must mean something other than rising prices for retired consumers like me. How else to explain that a plain loaf of bread at the plain grocery store just cost me five bucks, when it was about $3 a year ago? Granted, my non-existent wages haven't gone up, but ordinary necessities seem to be increasing in price. Haven't heard anyone I know get raises, or have their rents lowered, either.
Please explain. I truly want to understand why you're telling me that I should be able to afford a life.
21
Go somewhere besides 7-11 for your bread. Brown berry Wheat is 5 bucks for 2 loaves at Costco and probably just as cheap at Walmart.
1
@Lexicron Yep. Rent has doubled in my city in the last 4 years, and I'm about to be laid off from 2 of my 5 part time jobs. I made $23K last year and have no healthcare. This economy is destroying me.
1
Trump cut taxes for the rich because he knew that the economic situation left by Obama could stand the risk.
2
Someone ought to tell Krugman. He got that wrong as soon as the 2016 election results were in.
13
Many jobs created and some workers have three of them.
16
@Roberto J Pique I have 5 and will probably make below $34k this year. In the next two weeks I will be laid off of two of them.
1
I’m not going to say Donald Trump is just riding off the coattails of Barack Obama. This is very much Trump’s economy now. But what this article doesn’t mention is that the current administration doubled the deficit, while the previous administration repeatedly shrank the deficit. It’s the difference between two football players, where one adds healthy muscle mass through exercise and healthy eating, and another just packs on fat by binging on KFC.
25
Do they both block for the winning team. Then count me in in celebrating their results.
1
I think it is the Confidence Fairy. Business know they will be given the upper hand by our grifter in Chief. Some even know it isn’t sustainable but have a very short term view so they don’t care.
This is like 11pm at a frat party. First time away from adults. The hangovers and puking will come.
6
"It's the defecit stupid."
"We need to cut entitlement programs like medicare, medicaid and welfare to pay for this growing defecit." (that was the game plan right? Thanks Trump, Ryan & McConnel
I was wondering why there are so many people in every major town/city working multiple jobs? So many working in the "gig" economy (uber, lyft, food delivery etc)
Why are so many 20-30 yr olds struggling?
I guess things are great and I just don't see it. Well I don't need to worry about it.. our kids and grand kids can pay for the defecit and let's not forget the environment. I mean with the great deregulation "industry can finally grow without restriction" earn huge profits for the top and then leave the clean up and problems for the people. But don't worry that money will just keep trickling down. Yeah income is going up a bit but only after decades of decline while costs have gone up but hey who's keeping track.
10
Past column by Neil Irwin....."Would America Have Fewer Missing Workers if It Were More Like France?" June 20, 2016.
"What if the very thing often viewed as one of the United States’ sources of dynamism — flexible labor markets — is the driving force behind the economy’s greatest weakness: millions of people who are neither working nor looking for a job?"
Define 'flexible labor markets' And define 'dynamism' and who it works for. Does dynamism include worker protections, or only corporate protections?
1
Let's hope this booming economy does not embolden Trump to operate as a dictator in 2020 using Barr to run roughshod over democrats purging them from govt.
2
You picked a heck of a day to publish!
1
What's the overall QUALITY of these jobs? Has a real analysis been done there?
7
@Mannley Right?! We do have the analyses that are done every day by the workers having to slave to them. The results are in: they are awful and the American dream is over!
1
Isn't this the time when you should run a budget surplus and pay down the debt. If we can't do it now then when?
9
'We’re going to win so much, you’re going to be so sick and tired of winning' - D. Trump
Sounds like we are getting there, based on the complaining I read here. :)
6
Once again the old economics joke is proven accurate again.
"Economists have accurately predicted nine of the last five recessions."
4
Hearing this kind of reasoning is frightening coming from a "senior economics correspondent". The nay-sayers are wrong, the sky is the limit...don't worry, be happy. It's one of the reliable signs that an economic crash is on the horizon.
4
Gotta love all the Democrats who suddenly care about the deficit.
6
@Tony and all the Republicans who don't pretend to care about the deficit anymore.
17
There seem to be a lot of commenters who “aren’t feeling the better economy”. You might want to ask yourself if having enough spare time to rage in the comment section during business hours might indicate that your talents are underutilized or you're spending too much time trying to make your way into Reader's Picks. In either case just be aware that you might be feeling better by writing, but it is all “Sound and Fury, signifying nothing.” Now excuse me, I’ve got a job to do.
2
@ThirdWay Irony, anyone?
2
The possibility occurred to me that with all of the President's lies and his preoccupation with rigged systems, that the economic recent GDP and today's unemployment figures are inflated.
1
Is the NYTimes looking into the Labor Dept. Who trusts this jobs report? I don’t!
1
What is wrong with this article is that it doesn't acknowledge that the government lies about the amount of inflation. It is much higher than 1.6%
2
Wages increasing? In whose fantasy? It's a truism that many people have two or three jobs now just to cover expenses. It's also a truism that our generation is markedly less affluent than our parents' with less job security and uncertain retirements. What are the jobs that have been added? Are they minimum-wage jobs? Ask one of the many gap-toothed New Yorkers I talk to how their lives are going -- most people can't pay for dental work. I don't see this booming recovery, at all. Don't let Trump get re-elected on something that doesn't exist.
12
@Kristy You can improve your credibility by citing sources behind your claims. Do you know what a citation is? I'm a baby boomer my parents in the '60's had semi-white collar jobs, and probably made around $20k -- enough for a modest house and to put my sister and me through college. We retired a few years ago with a net work in excess of $4M through hard work, living below our means, not job switching, and generally being frugal. But we never went without something we really wanted.
1
"... opponents ... give credit (for) the already-improving economy (to) President Obama".
So, to be clear: leftists are now according credit for a strong and growing economy to the man who said such results were effectively impossible, and would require a "magic wand". Have they forgotten Krugman's prediction of an immediate market collapse and no recovery upon Trump's election?
Everything the left purports to know about economics has been repeatedly demonstrated to be wrong. Because leftist economics is based on wishful thinking, and leftists prefer the pathetic economy that a focus of "fairness" and "equality" produces rather than the unequally shared prosperity freedom produces.
Lower taxes on business make the country more attractive, eliminating the incentive to offshore or outsource. (The correct corporate tax rate is 0%) Repealing stifling regulations facilitates a more rapid return on investment. Enforcing immigration laws undercuts the ability of poor foreigners to undercut American wages.
In short, everything conservatives have said has -- yet again -- been proven to be true.
That economy which produces the best results for the greatest number is a free one, with low taxes, few regulations, and well-policed borders.
How many times with leftist economists have their overwhelming consensus proved wrong before the finally admit the facts?
4
@Brenda And it's definitely nice to see all that tax revenue pouring in elimination the deficit.
1
@jmay
Revenues ARE up; but you can't eliminate deficits when the Democrats bloated spending by 9%.
As always, it's not that taxes are too low -- it never is -- it's the left's insatiable demands to bloat spending.
1
So the economy that Trump promised, happened exactly as he promised, and the economists who predicted doom and gloom if he were elected are trying to figure out where they went wrong. Got it.
12
@Don Twohig It's amazing how many coal miners have their old jobs back.
1
You do not get wage driven inflation when corporate America has its jackboot on the throat of the workers.
4
In answer to an issue mentioned many times below,
For most U.S. workers, real wages have barely budged in decades, the Pew Research Center said in August. “On the face of it, these should be heady times for American workers. U.S. unemployment is as low as it’s been in nearly two decades,” the Washington, D.C.-based think tank said. “In fact, despite some ups and downs over the past several decades, today’s real average wage — after accounting for inflation — has about the same purchasing power it did 40 years ago.”
6
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. Friedrich Hayek
1
Of course the economy is booming: deregulate all the rules that will ultimately have to be paid by generations to come -- and lo and behold -- money flows. But what a price to pay! Any fool in office can deny such enormous items as climate and its resultant costs at the expense of the economy. But one way or another, we will have to accept responsibility and pay that bill.
11
White collar workers (Professional and Business) gained 535,000 over the last 12 months, Healthcare gained 404,000, and Manufacturing 22,000. And therein lies the Achilles heel, manufacturing. Rural America continues to lose ground with little gains on the manufacturing front.
All the Presidents hoopla about MAGA with his trade war talk has done little to nothing for those millions that voted for him, and the manufacturing sector continues to remain dormant. But of course those MAGA folks will be told how great things are and they’ll vote again the same way.
7
“ For what is a man profited , if he shall gain the whole world , and lose his own soul?”
Matthew 16:26
7
@Adam Stoler Evangelicals forget about that one.
1
@Adam Stoler. Are you ready to leave everything behind and live in a cave ?
1
Thanks, Obama!
10
Where is Paul Krugman?
Didn’t he say that the election of President Trump would send us into an economic dark age?
I wonder where he is today and what he is saying about our great economy?
Obama did it? Lol!
9
Remember, “cash for clunkers” ???? This was a ridiculous idea of the last administration to stimulate economy. Unbelievable. What you are saying now is the result of a tax cut, the reduction in federal regulations stifling business growth, A growing energy industry, Tariffs and trade deals. All good for the rich man and the poor man. I am on the road all day long and all I see our help one at sigh tariffs and trade deals. All good for the rich man and the poor man. I am on the road all day long and all I see Are help wanted signs and Sold signs on homes. New buildings new roads new schools new shopping centers. Say what you want about Trump and we know you hate him so hold your breath, this is the Trump economy.
8
This will sound bitter, but why not?
I graduated into the largely forgotten 1991 recession, had enormous difficulties exacerbated by a thoroughly dysfunctional meritocracy-worshipping family obsessed with mantra, rubbed in my face at every opportunity, "the bed you make is the bed you sleep in!!!" They believed help="enabling" and a sacreligious transgression of "adversity builds character" & "survival of the fittest." My parents were baby boomers who clearly rode the '60s expansion that continued the postwar boom, based on a dental school education financed by my grandparents, yet my parents wouod never veer from the most ruthless & ruthlessly self-serving "people get what they deserve" pieties. Nevertheless, any time a coming in for a holiday or family event might jeopardize whatever tenuous security I might have attained, they thought nothing of the most brutal coercion (years-long guilt trips and insults over my lack of success) to force me to participate at all costs, even loss of a job if necessary. "Family is everything" to them, except when it comes to the sacrifice of foregoing my presence at a single holiday dinner so I can hold onto my job.
I give this lengthy summary not to vent or whine, but to summarize the reality of one fallen through the cracks, living relentless poverty for decades. And this to declare that I consider any economic social contract VOID. The poor, I care about. But as to the upper middle class: They have done zero for me, & I owe them zero.
2
@Anonymous When did you graduate in 1991? You are aware that the recession ended in March 1991 aren't you? Usually entering the job market after a recession is a pretty decent time to be looking for employment. I graduated in 1990 in the middle of the recession. It was tough. I have worked my butt off during my entire career. It wasn't easy. Anything worth doing rarely is. It sounds like your family gave you sound advice you simply chose to reject it. If you fell through the cracks that's on you. We all have choices and decisions to make, and ultimately our success is based on those choices. Stop blaming others. This economy is about as good as it gets. Carpe Diem.
1
@Anonymous I'm not sure I would expect somebody who spends all day staring into a dark smelly little hole full of teeth to be a stellar parent. It has always puzzled me that anybody would spend their work life that way, for any amount of money.
1
Yet over half of US workers don't have $400 to spare, half of college students are skipping meals to pay tuition and racking up hundreds of thousands in debt, health insurance rates up, prescription drug prices out of wack. So lets see the COL today compared to the 1950's.
7
@Kay And yet while they don't have "$400 to spare" they seem to find a way to buy $100+ sneakers, pay $5 a day for coffee drinks, buy $10 cocktails on weekends, buy designer clothes, and get all of the most current electronics. It's true that it's challenging to make ends meet - and some goods and services (like health care and education) are ridiculously priced, but I'd suggest that the lack of emergency savings is fixable for many people if they change their spending priorities.
6
It's always possible that this administration is simply making up numbers. Use your imagination.
4
First of all, economists ain't the brightest bulbs in the chandelier. They never get much of anything right. They are very good at post hoc explanations -- they sound very very intellectual you know. But predictions? Remember the genius economist who writes (if that's what you want to call his endless screeds ) who said the market would crash if Trump were elected.
Obama gets some credit -- but remember -- we were recovering from the great recession because of policies Bush 43 put in place and Obama continued. So -- there's some credit. But the real expansion has been under Trump --- because he's a capitalist who believes in growth and has done things to rev up the economy that Obama would never do.
Live with it -- for probably 6 more years.
5
@Ralphie like, bankrupt the next three generations, minimum. Borrow from Peter to pay Paulina. People aren't saving. The new jobs tend to be low-paying; 'good-paying' industrial jobs, e.g. in Lordstown, OH, are disappearing. Student loan debt is crushing. It's one thing to say, unemployment is the lowest in 49 years. But, in 1970 a family of four could live a middle class life on a single income. Today, not at all. Meanwhile, the debt per person is $70K, and is rising at a faster rate than ever under the Obama Administration (which had to contend with the Great Recession). See: https://www.statista.com/statistics/203064/national-debt-of-the-united-states-per-capita/. The top marginal tax rates should be rising: we *could* continue our economic growth, *and* lower the debt, if we would increase the higher-income tax indices. But we don't. In the end, the low and middle classes will be left holding the bag, because if the promises made on Social Security and Medicare have to be broken (as McConnell insists, in order to sustain the unwarranted Trump tax cuts), it won't be Republicans or the wealthy who will suffer.
1
@Albert K Henning I don't disagree with you on some issues. The debt level we have is not sustainable -- particularly when (not if) interest rates go up -- return to their historical levels. But IMO the only way out is growth.
And yes -- I grew up in the 70's and most of the people I grew up with made it on a single income and lived well. All the problems you identify are real. But, a growing economy and increasing demand for labor -- even lower level labor -- should drive all wages up.
But both parties have abdicated responsibility re the debt. But it should be front and center. We need a decent plan to pay it off starting with not borrowing.
At the same time -- a growing economy is a plus. It doesn't mean things are perfect -- but would you rather have a slowing economy?
1
Consider people who've been retired 10-20 years and experienced 4 years with no net increase in Social Security payments (all increases went to pay increases in Medicare). Consider this same group of people finding interest so low on certificates of deposit that the money would have earned nearly as much stuffed under the mattress. Further imagine a good part of this group was invested in a highly diversified stock fund requiring yearly minimum distributions which happened to fall at the end of December, 2018. This same group has seen increases in grocery/home goods prices double or almost triple while Social Security net pay remained unchanged. Oh! And sometimes these folks like to eat out but find going to a restaurant costs has risen, well, a lot. Maybe the new hot economy doesn't feel so beneficial.
11
Booming Jobs? Really?
I'm sure the word "Boom" was lurking in Neil's subconscious and he still doesn't know why.
Take Baby boom, for instance - I noticed that he doesn't mention how many people have retired since 2017. Also how many people have stopped looking for work since 2016 and aren't even on anyone's radar anymore.
By the way, 3.2% over last year's wage of what - $7.25/hour? That's the actual federal minimum wage rate.
When was the last time the actual federal minimum wage of $7.25/hour went up.
Lindsey Graham probably spends $7.25 on a glass of Perrier when he has a lunch that costs him 10x that much depending on who he's dining with. (As in anyone in office but Trump.)
Depending on what ratios you're dealing with, Trump can brag all he wants about the unemployment rate.
It's just as erroneous as anything else that comes out of his mouth.
Working people are hurting. What's booming are medical costs, the cost of food, utility bills, and I don't know if you've noticed this, but mortgage loan rates are also gone up since 2016.
2
It's easy to see why the economy is doing well: we have a very fiscally liberal president who has continued the very same successful economic policies that pulled us out of recession during Obama's presidency. A few years ago, Trump was weeping and wailing about how low interest rates and deficit spending were going to ruin our country. But now that Trump is in charge, he's taken low interest rates and deficit spending to new extremes. If it ain't broke, don't fix it.
We'd be doing even better if Trump hadn't cut taxes on megacorporations, since he could have invested that money in infrastructure instead. But he can't be a liberal all of the time.
4
For those of you that claim this isn't "Trump's economy," might I remind you of President Obama's claiming that Trump had no clue about how to bring back manufacturing jobs. Obama mocked Trump's optimism and sarcastically wondered what kind of magic wand he had. It wasn't magic though. It was vision and ability.
10
Economists thought that it COULDN'T happen.
It wouldn't if companies were sharing their profits with their employees and if employees could demand more pay (i.e., if unions were as powerful as they once were).
4
Goodish news. But we must not let it distract us from the steady undermining of our democracy that is unfolding before our eyes. It employment is good, this CANNOT be used as an excuse to give the Trump regime and its erosion of everything this country has stood for a pass. And it will be used for that, and the 30% will tout it.
7
My confidence in these numbers is shaky. Did you read where they also saw the Labor Force Participation rate dropped? Only 62.8% of those 16 years+ who are able to work are employed. Do we know the QUALITY of all these new jobs? Are they full-time? Part-time? Do they pay a LIVABLE wage? Do they include healthcare benefits? Could this be why your not seeing inflation? Sorry, but I get the sense that "the Ivory Tower Syndrome" is at play here.
5
Low unemployment and low inflation are possible. Japan has <3% unemployment and <1% inflation. Singapore is 3.1% and <1%. Germany is 3.1% and 1.7%. And Hong Kong is about <3% for both. All these places are economically prosperous.
If "Crazy Rich Asians" is to be trusted, Singapore is fabulous and everyone is happy. But Japan, Germany, and Hong Kong aren't exactly known as home to happy people.
Thus I'm not sure if low unemployment and low inflation by themselves are an unalloyed good.
1
Great news!
Now do :
rent
health insurance deductibles
college costs
savings
6
say what you want about this economy, but we are still not paying down our national bills.
In a good economy this would not be happening.
2
Inflation ain't exactly low if you want to buy a house or rent an apartment, or for that matter buy an office building.
Tried shopping for medical "insurance" Mr. Irwin?
Noticed the increase in the retail price of milk over the last 3 years?
The metrics are wrong.
9
Interest rates are still comparatively low. So not sure why you are lumping buying a house in there. Probably a lot cheaper than your parents. If as you guys are predicting you should be buying tons of property and paying it off with inflated dollars.
1
P L:
“Interest rates are still comparatively low. So not sure why you are lumping buying a house in there.”
Becuase the house that should sell for say $200,000 is on the market for $500,000. And in other “markets” the price is even higher. But many Americas, many with college and real graduate degrees, are making less than $35,000.
Your comment says you just don’t get it.
“If as you guys are predicting you should be buying tons of property and paying it off with inflated dollars.”
Nowhere have I said “massive inflation is around the corner, or exists today," I said, some things have increased a great deal more in price than Irwin implies and that the measurement tools (“metrics”) are wrong.
Thank you for proving that you’re just not paying attention.
Just trying to sound like Irwin doesn't validate him.
Another big error you made, you assume average Joes and Janes have access to huge amounts of credit. That’s in some regards your worst mistake.
Submitted May 4th 8:02 PM, eastern
1
Now just hold on there. President Obama said that manufacturing jobs would never come back and the media excused him saying this is the new normal. In a town hall President Obama said of Trump. How is he going to bring jobs back? Is he going to wave a magic wand. It was clear President Obama was anti business and his lack of experience resulted in kicking the can down the road on most issues.
7
Good by Democratic hopes for 2020. Trump doesn’t even need Putin now.
3
Oh good, I was waiting for an "it's different this time" argument. I'm old enough to remember "the new economy" of the 1990s. We seem to run out of land in Florida every couple of cycles too.
1
The article itself and most of the responses ignore or underestimate the significance of the runaway deficit that the most recent tax cuts created. It is incredibly easy to generate new jobs if a party doesn’t care about red ink. How many times will the working classes endure this cycle where the wealthy and Republicans derive most of the benefits from deficit fueled growth when they sail the ship, and then make Democrats the scapegoats who have to take back the goodies in order to bring the budget back into balance ???
6
@Barbara
I agree, and add: Removing environmental regulations will hurt in the future, because eventually we need to clean up our world. Future generations will pay for that, as well as the estimated 10/12 thousand folks who will be sick due to pollution. oh, I forgot, Trump's shiny new healthcare plan will fix that .. .
Yes, tax cuts have created some quick growth, but using taxes to invest in clean, alternate energy on every level, with all the knowledge and equipment necessary would create slower, more lasting growth. New industries, new professions.
Trump and his followers don't seem interested in that; they only want to invest in existing industries and technology thru tax cuts. Future generations will pay the bill.
2
No matter how you slice it.. it's good news for Trump..
---Will be difficult to beat a sitting President overseeing a strong economy.. Of course the economy can change quickly..
..But, its clear Democrats are going to need a lot more to run on than the Mueller report... a lot more.
13
@mike
Sadly, you are correct. It’s a recurring nightmare.
Jerry Saltzman
1
There's been tremendous inflation rates in artwork, 10 million dollar+ residences, and yachts. Shows you where most economic gains go. You aren't going to get inflation on CPI measured things until working people get more money.
2
For real people with real jobs (except perhaps the top .1% to 1%), things are not getting better, but worse ... you and the NYT do a disservice to working Americans by trumpeting numbers that do not reflect the truth of their ever more anxious financial realities (health care, education, housing, retirement savings...),
a deficit that is being used to scare-monger unto social safety net cuts .... this is the real story for the vast majority of Americans, and your reporting ought to reflect this difficult truth.
7
You must not be reading the same paper. The NYT is basically saying these numbers are smoke and mirrors.... unless of course they continue then we can credit Obama but if there’s a recession it’s Trumps fault.
1
How about adding to headline, "...and Massive Deficits"??
3
Yes it WAS supposed to happen. Maybe not in the minds of ignorant collectivist ideologues like Paul Krugman, Barak Obama, Hillary Clinton, and Bernie Sanders but for the rest of us who recognize that reducing needless and onerous regulations, cutting tax rates (particularly for corporations who were suffering under some of the least competitive tax rats in the world), and dealing with unfair international trade practices is a recipe for unleashing the benefits of capitalism, this is no surprise at all.
6
@Eric - I think you hit all the jargon. You forgot to pick on Soros, but otherwise, a complete gush of meaningless anti-regulatory-speak that would do the Mercers and Kochs proud.
"The economic recovery that began in 2010 hasn't collapsed under two years of the current administration" isn't exactly vindication for the policies that came about after the recovery had been going for years.
6
@Eric Except, of course, for the fact that the massive stimulus (300 billion in new deficit spending) is what's caused the small uptick in growth.
Job creation remains at slightly below that of Obama's second term.
7
@Eric
Removing environmental regulations will hurt in the future, because eventually we need to clean up our world. Future generations will pay for that, as well as the estimated 10/12 thousand folks who will be sick due to pollution.
oh, I forgot, Trump's shiny new healthcare plan will fix that .. .
Yes, tax cuts have created some quick growth, but using taxes to invest in clean, alternate energy on every level, with all the knowledge and equipment necessary would create slower, more lasting growth. New industries, new professions.
You & Trump don't seem interested in that; you only want to invest in existing industries and technology thru tax cuts. Future generations will pay the bill.
3
Phillips curve originally showed that as unemployment fell, wage inflation rose, not price. Normally, price inflation follows wage inflation. However, wage inflation may not translate to price inflation if productivity rises (it has risen to highest level since 2010) or profit margins narrow (companies have beaten their earnings guidance). That’s why the price Phillips curve has yet to reappear. But in the midst of great economic news, the labor participation rate has fallen for two months in a row, which means more people have stopped looking for work. In any case, economic indicators that we have been using since the beginning of time is showing great economy, and we should stop nitpicking. And I like how the article gives credit to both Presidents Obama and Trump.
1
Despite these numbers, there is not income equality for many people. College debt and a lack of affordable housing force people to take on more than one job.
The numbers are flawed at best and a meaningless index that does not reflect how many Americans live.
1
Whatever happened to the real unemployment number? I remember during the campaign Trump would bellow about this number and, once, even claimed the correct number was around 42%. Strange, he never mentions that anymore.
4
Ok but it would still be lower under Trump.
1
"Not that long ago, the overwhelming consensus among economists would have been that you couldn’t have a 3.6 percent unemployment rate without also seeing the rate of job creation slowing (where are new workers going to come from with so few out of work, after all?) and having an inflation surge (a worker shortage should mean employers bidding up wages, right?)."
Well, the unemployment rate is much higher, and "employment" means things like working 5 days out of the month. No wonder wages aren't exactly going up for most workers. There's also the fact that Obama finalized turning the economy over to speculators, who reward themselves, not most workers.
This isn't very hard to apprehend.
Submitted May 3rd 4PM eastern
2
"There are even early signs that the tight labor market may be contributing to, or at least coinciding with, a surge in worker productivity, which if sustained would fuel higher wages and living standards over time."
Except worker productivity has been rising for a while now, in part having to make up for job cuts by employers, and it hasn't been leading to an increase in wages. So the new 'surge' will?
2
@Amoret Try reading the article. "Average hourly earnings continued to rise at a steady rate of 3.2 percent over last year."
1
Jobs, or actual sustainable jobs that don't wreck the planet?
Exclude those created by gutting environmental protections, pillaging our natural resources and accelerating climate change, and then do a recount.
I'm not sure it would take both hands.
5
"The continued boom in the American job market suggests that economic policymakers need to be open-minded about when the old relationships and rules of thumb no longer apply."
In other words, "it's different this time."
Where have I heard that before?
4
@Jim Anderson How about "A watched pot never boils"?
1
We need to rethink how we measure inflation. Our present metrics and formulas are not working.
4
Both the unemployment numbers and inflation index are deeply flawed metrics...except when a Democrat is president and these deeply flawed measures happen to indicate a healthy economy.
4
So let's ask ourselves what's changed since the era of the Phillips curve.
Globalization for one. This has put a limit on the ability and need of companies to raise prices given that they face pressures from low-wage foreign competitors.
Also, workers lack weapons in the struggle for income. Unions, in particular have been entirely dismantled in the sectors where they used to function.
Also, the structure of the economy has shifted from manufacturing where unions had a strong presence to services where they do not.
Adding money to the system by itself won't generate price inflation. (The effect on asset prices like equity shares is another question.) For inflation to occur people have to have the collective leverage to move wages. And we're not there yet.
3
This is not Trump's economy, but neither is it Obama's economy. Presidents simply have no effect on the economy. These numbers kinda prove that.
2
@Fourteen14 I beg to differ. As a business owner who interacts with many other business owners and key executives, we all know of many regulations that simply don't make any sense. Ones that provide very little benefit or societal protections but are costly and cumbersome to comply with and prove compliance with. Trump has done more to roll back these nonsense regulations than any other President in my lifetime. Companies that can free up time, energy, and resources from dealing with such nonsensical regs can use it for more productive activities. Also the corporate tax cut has been amazing - it's led to well-documented bonuses, pay increases, and further capital investment. While I agree that Presidents don't drive the economy and often they are give far more credit (or blame) than they deserve, in this case what Trump has pushed for has unleashed the animal spirits.
2
@Eric
Example(s), please of nonsense regulation that has been rolled back.
1
It is not just about inflation. It is also about leaving room for the Fed to take action should another recession hit. I'd rather the Fed protect our economy against a future recession, than leave no measures that can be taken in the event of a crisis.
7
One thing is for sure, we don't have this all figured out all of a sudden. The US economy moves like an aircraft carrier, and the lag between actions and ramifications is significant. Short-term reaction so new policy is somewhat predictable, long-term impact is impossible to predict. Trump has only been in office for a couple of years, and many of his policies have been in effect for an even shorter period of time. The short-term effects were a predictable continuation of the Obama recovery and a heated economy. The inflation could still come at any moment and a collapse of the financial and stock markets are not out of the question either. The US government is playing a risky game by keeping interest rates so low during prosperous times and if the economy does turn for some reason, they will have very little ammunition to throw at the problem. It's certainly not time to declare Trump a financial genius or his policies a success.
9
Why is it that even a "senior economics correspondent" such as Mr. Irwin doesn’t look at the big picture? Nowhere in the article does he mention that an untold number of the "new jobs" are simply repackaged vacancies left by retiring workers. Never in history has such a large percentage of the work force been lost to retirement. The US birth rate jumped in the late 1940s to unprecedented levels and stayed there until 1964. As a result, since about 2014, there has been wave after wave of retiring boomers, a trend that will continue for some years. We do not have an abundance of jobs — we have a shortage of workers for the more skilled jobs previously filled by those who retired. We also don’t have an overabundance of unskilled jobs due to the "great economy," we have a shortage of workers due to the ejection of tens of thousands of illegal immigrant workers. In addition, it is not mentioned that a high percentage of all new jobs are temporary, or that someone working a single hour in a month counts as a job filled for that month. So take away all the smoke and mirrors and statistical voodoo and you have a much less encouraging picture.
24
@Cheryl Adam
You are right that two factors are either overlooked or underweighted.
First, as you mention, as boomers retire in large numbers, they move directly out of the labour force, exaggerating their effect on unemployment.
Likewise, as discouraged workers return to the labour force, they are bypassing their normal tenure as unemployed and moving more quickly and directly into employment, again exaggerating the employment numbers.
There is no doubt that labour force dynamics have changed, and the Phillips Curve is being rightfully questioned, but when the low unemployment figures are linked to a debt-financed deficit and other procyclical fiscal measures such as reduced taxes, and further confounded by dramatic changes in demographics, there very well may be less to cheer about than appears on the surface.
Furthermore, when domestic employment growth is predicated on mercantilism and protectionism, policies that undercut real GDP growth, there is a pernicious and artificial component that demands caution and circumspection.
4
@Econ John. Regarding your point of discouraged workers returning to the work force, who cares if this exaggerates the employment numbers? Not long ago, I heard many critics saying that real unemployment numbers were skewed because many people stopped looking after their benefits ran out and were thought to be gone permanently. The unemployed are a drag on the economy and the fact that discouraged workers are back means an important tipping point has been reached. They now support themselves in the official job market, pay taxes and buy stuff. I just retired after 47 years of leading many super-arcane hi-tech projects for a Fortune 25 company and am pleased as punch that there are skilled people to hand the work to.
4
And let's include how many employees are "underemployed," working longer hours, or second jobs, to make less money.
1
The layman's definition of inflation; too much money chasing too few goods. That is hardly the case over the last couple of decades.
Couple the fact that middle class incomes have been stagnant, or even declining, since the '80's, with the fact that corporate expansion is only ever fueled by consumer demand, inflation isn't going to be a problem until rising wages push demand. At my age I'm not holding my breath for that one.
4
@Mike Schwarcz Hardly the case over the last decades if you forget about housing. When your rent that is half of your expenses is growing by 2% a year, and that you’re saving a large part of the rest of your income to buy a place that’s appreciating by another 5% a year, I’m not sure it matters much if the inflation on TVs is only 0.5%.
Calming inflation on housing (as rising rates would clearly do) might be worth it even if it means slightly lower growth. Growth is not everything: what matters is living standards for the average person and their kids.
6
@Bob Robert Sorry, the value of the house you bought didn't go up. The value of the dollars you paid for with have gone down sadly. If I bought a house in 168 for $45,000 and it's worth a million today, when I sell that money just goes to buy a comparable home or I become a renter. Fail to see how I'm better off?
1
@Mike Schwarcz Well, isn’t that the exact definition of inflation, so exactly what I said? The inflation on the housing market means the money young people are earning is worth much less. It’s great that TVs have become much more affordable, but if you can’t even afford a place to call your own you definitely have an inflation issue.
Besides, if your house is now worth a million, let’s not pretend you’re getting nothing from it: you can downsize (and get much more comfortable than if prices hadn’t shot up), or move where $48,000 houses have not got to cost a million, and get a comfortable retirement package.
Or just not suffer from housing inflation because yours is paid for and benefit from low inflation on everything else. And buy a big TV.
1
In a globalized economy, inflation in a specific country is almost irrelevant. Two things have been pretty clear since about 1994. 1 Global supply of almost everything out strips demand for that same widget driving down price (deflation not inflation!).
2. The more the elite of a country extoll "free" trade and institute policies to protect frictionless flows of capital to facilitate trade in goods, the more susceptible that nation is to deflationary wage rates and the outright loss of jobs, see US 1981 till present.
I'd add an anecdotal 3rd. Quality of products, workmanship, customer service, and ultimately customer satisfaction at every level diminishes such that if measured would probably equal the spread between a flat or stagnant wage rate line and the combination of rise in productivity and inflation.
4
Quality of products worse than the “good old days”? What days were those? I’m writing this on my iPhone that has performed flawlessly for 5 years even tho abused horribly. The pickup truck in my driveway has 120k miles without a problem. The lightbulb behind me in the reading lamp will last 20 years. I remember how products were in the 60’s & 70’s — shoddy construction. Nostalgia is a corrosive emotion.
2
No wage growth means no inflation. It's pretty simple. What would drive inflation ? Wages are still woefully low for the middle class and there just aren't enough rich people to drive inflation up. Middle class wages have been stagnant for 40 years so a 3% wage growth is almost insulting. Still not much more discretionary income in the middle class these day. The economic models are clearly incorrect for this type of economy.
12
Economics needs to become more scientific and less politically biased. Relying on past experience and on mathematical models is not getting economics there.
To become more scientific, economics needs a way to perform experiments, tweak variables and rerun them, and thereby figure out the whats and whys of an economy. We experiment on our own economy (any policies we adopt can be regarded as experiments), but the economy is too complex for the results to be clear or decisive. What we need is a sort of wind tunnel in which we can fly various economies and see how they perform in calm winds and when buffeted by gusts.
Computer modeling gives us a sort of wind tunnel, but it has problems. Multiplayer simulation games on the internet would give us a more powerful wind tunnel. When a game fell apart, we could restart it at any point and see which modifications of rules or environment would keep it going.
More important, for players in the game, the results of the game would provide the best evidence available for whether the game worked or not. A results-based consensus might arise that we could use to make and sell programs for our real economy.
2
A hard to predict/understand economy is not an excuse to leave behind the tools and data of recent decades. Indeed, the policies that have generated the sustained period of growth we are seeing now are heavily informed by these same tools and data. The argument this article should be making is not that the economy is now too complicated to manage, but rather that we need to maintain a Fed independent of ideologues who will always only see one side of the debate. I want these folks in a room debating policy alternatives based data, models and any other information they can pull in.
3
The 30-40 run of increased inequality and wage stagnation can partly be attributed (or at least not helped by) Federal Reserve Monetary Policy. It has been the belief that lowering unemployment rates will inevitably lead to higher wages which will drive runaway inflation. Therefore, whenever unemployment reaches a certain level, interest rates should be raised to head off inflation.
This approach has prevented the labor markets from becoming tight enough to force employers to raise wages to attract and retain employees. Now we know the relationship between tight labor markets and high inflation is tenuous and has driven an overreaction by the Fed.
There were Regional Bank Presidents who advocated raising rates back in 2015-2016 when unemployment was at 5% and heading lower. I'm glad Janet Yellen and the majority of the Federal Open Market Committee kept rates low. Millions of people who are employed today would have remained on the sidelines. And for that, Yellen was fired by Trump.
Now that wages are finally going up, let's let working people reap the benefits for a change.
4
I think we have to understand that the Trumpian approach may create economic growth. The economy did well under Reagan as well. The challenge is that we privatize profits and impose the costs on the public. Environmental degradation is expensive, and a cost largely bourn by the public sector. Likewise caring for the sick and disabled. If Trumpian economics works, the Democrats need to consider how their alternative will create similar advantages.
3
@Todd trump and the GOP congress added 300 billion to the deficit.
That's an amount equal to 1.5% of GDP and more than enough to account for the difference in the economy between Obama and now.
4
The author's crediting the inherent complexity of the U.S. economy as having accounted for much of dissonance between economists' forecasts and actual results is fairly placed.
However, there is no reason for anyone in the economics profession to act surprised that it has take a long period of historically lower unemployment (as measured by the Labor Dept.) to finally spur a meaningful lift in real wages. (See accompanying article, "Why Wages Are Finally Rising, 10 Years After the Recession,")
The huge gap between the official unemployment rate and well known level level of actual under-employment has been the elephant in the room for a number of years.
3
@George whitney The supposed gap is not real and never really was.
The "participation rate" measures people working or seeking work against the population of Americans age 16 and up. This includes many millions in schools and many tens of millions over 65.
The over 65 cohort grows by more than 1,000,000 per year. They're counted but there's no way most will work or want to work.
If you want to consider what the effect of this is, consider the following:
In April we added 4,000 manufacturing jobs,
And we added 7,000 "elder care" health jobs (i.e. wheelchair pushers).
That's a trend that won't change.
2
And compare the unemployment rate to the natural rate unemployment....
1
@Paul’52 The gap I am referring to is that between the number of individuals counted as unemployed, but actively seeking employment (the Labor Dept.'s unemployment figure) and the number of individuals of prime-age (25-54) who, for whatever reason, are not employed. Those over 65 (the aging baby boomers) do not enter into this question.
In March of this year the U.S. unemployment rate translated to a total of 6.2M individuals. The U.S. population in the prime-age chort stood at 126.2M at the same time, 22.1M of whom were not participating, for whatever reason in the labor market.
Prime-age labor market participation stood at 84.4% in Jan. of 2000, and dropped to a low of 80.7% in 2015. Represented a decline of over 4M prime-age individuals no longer participating in the labor market. Today the prime-age participation rate stands at 82.5%. Applying the 2000 rate, 2.4M individuals have dropped out of the labor market. It is this gap I am referring to.
Leaving the economics jargon aside, laymen have lumped this together with the very large number of "under employed" (I drive for Uber, but I used to handle payroll) to arrive at their well founded understanding that the labor market continues to have a huge amount of slack in it. It is this "slack" that has helped undermined labor's pricing-power.
Laymen saw this "elephant in the room," and so should have all professional economists. That's my point.
1
Too bad many of the jobs don't pay a living wage.
This is a delusion, folks.
10
@John agreed
1
And just think how much investor confidence has been dampened by the constant attacks in the press on this President and his policies. Winning conquers all!
2
@Peter Trump's so-called policies are nothing but 1. deregulatory frenzy and 2. kowtowing to the super wealthy.
1
Global climate disaster is on the way. If we don't stop down-speaking the magnitude of what is coming (calling it global warming is peddling it softly), we will all lose and stats and the economy won't matter diddle. Wake up! Connect to Nature. Our present form of disconnect-from-natural-resources capitalism encourages us to ignore the coming tidal wave of death.
6
If you want a stronger economy put an experienced business person in charge. If you want a stronger government put a career politician in charge.
4
@God trump is our third businessman-president.
The first two were Herbert Hoover and George W. Bush.
Sorry, God, history doesn't back up your position.
1
@God And what do we get with a reality TV personality with a history of bankrupt businesses?
1
Warren G. Harding although "politician", created the Cabinet of Big Business/Underground transactions.
1
Throw money at the economy, and of course it looks great! Deficit over $1T, almost double since Trumps tax cuts. GOP only care about deficit when a Dem is in the White House.
51
The duplicity of the Republican Party is ludicrous.
1
An economist celebrates the booming economy but doesn't even mention running $1trillion deficits during it. Seems like malpractice to me.
21
When Obama was the President "that wasn't supposed to be possible". When it happened - thanks, Obama.
4
The trump sycophants here always leave out the exploding deficit and the increasing trade imbalance. Bills have to be paid.
Obviously they don’t care about future generations.
6
@glennmr They don't pay their bills and have never been held accountable for their criminality. Of course they don't care about future generations. They don't care about today other than how much pain and suffering they can inflict on others while avoiding being held responsible for their thoughts, words and deeds.
1
What is not mentioned at all in your article is who controls the wealth? As the wealth has been consolidated into fewer and fewer hands there are now forces which weren't at play decades ago. I know this sounds conspiratorial and faintly Illuminati, these forces want to maintain the status quo which leaves them in control and their wealth in their own hands. In a way they have achieved a balance making our situation largely livable but then also so filled that we are incapable of perceiving how we are actually being manipulated. We have become docile and strike out not against them but at each other.
They want the Republicans in power as they support systems which benefit them. If it takes a Trump to achieve that end, then so be it. Trump will only go so far as they want him to but no further. Through the Obama years the words "volatility in the market" was used constantly despite his steady hand. With Trump there is no steady anything but the market doesn't fluctuate according to his absurd maneuvers. It is stable and growing just enough to make us say "Everything is fine!"
The question becomes "Is the status quo good enough?" because with the packing of the courts with conservative judges, justice in this country will be for those that paid for it and not the rest of us. We live in treacherous times and, if the economy is not behaving the way it has and should, then maybe not enough of us are looking for why it is behaving the way it is.
11
The economy is better for whom? 1 hour of work counts for employed. Several jobs, mine included (teacher) have not kept up with the rate of inflation from the pre-2008. My medical has gone up, my housing has gone up, and therefore the linkage in the market basket that measure Comsumer Price Index which in turn gives us our inflation rate is very much out of date. As for the Phillips Curve, is it irrelevant or have we transfered the x and y variables with new ones? Not sure, but does raise an interesting point to question the way in which some wish to measure economic health.
11
This is still trickle-down economics. Our government is living off the public credit card and racking up gigantic debt. Someday that bill will come due and so far we're not seeing investment in the U.S. that is commensurate with Trump's tax cuts to the 1%. Wage stagnation is also a problem. With digital technology the labor force is now global. The managers and developers can live in the U.S. while the workers are in other countries. For people on the wrong side of the digital divide, this economy is not so good and many of them are not keeping up.
9
Funny watching the sufferers of Trump Derangement Syndrome (TDS) try to deflect all this good economic news by giving credit to Obama. Boy, is Trump lucky Obama set the stage for this economy!
Fact is there is no, I repeat no, counter argument for the policies Trump as implemented to spur this economy. All the Democrats have is that TRUMP IS A BAD MAN! Investigate! Get his tax returns! Impeach!
Worse yet, the Democrats running for President (with the possible exception of Joe Biden) are calling for socialist policies to be implemented. Really?
All this is mind-numbingly stupid and misses the point of improving the lives of Americans. OK, fine, Trump is a philandering, bombastic New Yorker with some factual accuracy issues (often to the point of hyperbole). Fine. Come out of your TDS-induced bubble and look at the results of the policy decisions to see that, yes, the lives of average Americans are in fact improving.
Rather than continue tribal warfare with Trump, try actually working to figure out true continuing problems with the country: cost and access to healthcare; illegal immigration; cost of college education. The answers will not be pure-play socialism (as offered by the Dems) or cut-throat capitalism (as offered by the Reps) but a compromise solution that moves things forward.
Stop the nonsense and get back to the issues Americans care about.
9
Deficit? I guess now with Trump, deficit no longer matters to GOP.
4
@Hillary And I guess now that Trump is President, the left suddenly cares about the debt and deficits?
1
@Hillary Get back to the issues that WHICH Americans care about? The majority of American people didn't vote for Trump.
1
Anyone who studied history and the Industrial Revolution knew this would happen. If you watched Quebec for the last 50 years you knew this would happen. Quebec had economic growth growth of over 13% and a four billion dollar surplus. We will have a worker shortage for the next generation. Our great recently most have province of Alberta which has a fossil fuel based economy elected the an idiot premier and a right wing government to bring back the economy of five years ago that was great but oil was $100 a barrel. I love Alberta but bringing back a government that knew what to do when the economy was great was absolutely ludicrous in a time where health, education and welfare are absolutely of greatest importance is insane. Oil will leave them as vulnerable as Venezuela, Iran and Russia, even the Saudis know oil is not the future.
Government in a world in the midst of world of technological revolution requires vision not nostalgia.
A week in DC let me know how wonderful Americans can be and how well educated and understanding America's best and brightest could be but someone has got to put an end to the insanity of being plugged in and on the treadmill 24/7.
Job growth and lower unemployment spurred the urban growth of 19th and 20th centuries but it is 2019 and the last ten years have seen a similar growth in jobs but this time it is a technological revolution and only government can provide the education and security that can ameliorate the insanity of insecurity.
2
The stock market will crash under Trump.
Trade tariffs will destroy manufacturing jobs.
Trade tariffs will spike inflation.
2
So far President Trump has said and has executed his policy’s however unpalatable to the elite bi-costal media .. it has proved that “fear” in economics is not a good plan for investors... bold and strong and not sheepish well done Mr 45 !
4
“The results of the last few years make you wonder whether we’ve been too pessimistic about just how hot the United States economy can run without inflation or other negative effects.”
Too pessimistic, or not imaginative enough? It’s far more impressive to increase quality-of-life in a population, than it is to reduce unemployment.
I highly doubt that most Americans would claim to be happier in their daily lives than they were prior to the last market meltdown. Having a workforce which requires a supplemental “gig economy,” is the first step towards the next era of mercantilism.
Nothing costs quite as much as “free.”
5
It seems to me that Donald Trump said this would happen but all the experts said it would not.
6
@NYChap This isn't what Donald Trump said at all. He promised all those people at his rallies that wages would go up.
5
@NYChap You mean that the rich will get richer? If so he was right.
1
We are stuck in a rut and use metrics that are archaic, nonsensical, really, considering the dire living conditions for tens of millions of Americans, are preposterous!
What could be more important that happiness in life?
Oprah visited Denmark to understand why the country scores highest in national happiness. She was invited in people's homes, and saw smaller homes and little possessions, but high interest in quality of food, family rearing and social interaction, immense commitment to education and professional training, social and health services that afford all citizens the care they need. Mind you, economy is very competitive and working wages are high!
Taxes are the highest in the world and yet the people she interviewed were fine with that.
Oprah asked two women if they are happy with their...Socialism. Their response was " we don't call this Socialism, we call it To Be Civilized"!
To be Civilized!
5
Thank you President Trump!
5
Cheers to POTUS and policies that actually benefit the masses instead of catering to minority billionaires.
4
@Nature Vote How are you defining "masses" please. Donald Trump didn't win the popular vote i.e. the MAJORITY of voters didn't vote for him. The majority of voters are the "masses".
1
Why the surprise? The president reduced taxes, cut regulations, and reigned in out of control agencies... and we got rid of Obama. Of course the economy is going to boom.
9
@Dan Denisoff
It's funny how some people conveniently for get the economy Obama inherited.
1
@Dan Denisoff
Yeah, get rid of those pesky regulations that actually protect people and the environment and curb capitalism's excesses...but who gives a darn about all those protections when you have a few more dollars trickling into your 401k.
1
Full employment at the expense of our climate. You created coal and fossil fuel jobs. Look at China and India . They had full employment and now they are wearing masks 24/7 and drinking polluted coal ash damaged water. Very sad.
4
What kind of jobs? Perhaps these "job holders" are paid so little they are not "jobs" at all, but count in the statistics. Or perhaps the words "under employed" apply.
1
Retail stores are closing, I see more homeless people than ever, and the housing market has slumped. I don’t know what metrics they use to declare the economy “booming”, but clearly it is time to re-evaluate their usefulness.
2
Great if you want to be a part-time pizza delivery person, Uber driver or sales clerk who clocks in 34 hours/week per the algorithm so the company does not have to consider you a full-time employee and pay you benefits. Not so great if you lost a mid- to high-paying job in the last two years and want to get back on the economic ladder at roughly the same rung at which you were kicked off with the hopes of at least covering your mortgage and expenses and not going too deep into debt.
7
Booming jobs, low inflation . . . and its all because Obamacare, the thing that was going to kill the economy and kill jobs, was repealed. Can you imagine what would have happened if it remained in place? Which it did. And nothing bad happened. And nobody mentions this.
1
And there is nothing magical about a 3.2% annual rise in working class salary while the 1% have been averaging 9% capital gains for nearly the last decade.
7
For years Republicans screamed that Obamacare was a jobs killer. Apparently not. Clinton and Obama raised taxes. The economy grew anyway. The one thing that wrecked the economy - relentless, reckless, financial speculation is creeping back in. My house is valued today at $50,000 less than I paid for it in 2004. In 2009, my wife took a $30,000 pay cut that did not improve until 2018. I estimate she lost about $150,000 in wages during the recession. The banks got saved. Middle income families did not.
4
Lots of comments saying the economy is great! We are headed for a collapse bigger than 2007 thanks to the GOP tax bill among other things!
All these high paid economists talking this and talking that. here is all you need to know....a few families have all of the money, the rest have none. Give the majority of people the majority of purchasing power and you will have sustained growth. It's simple, but the rich want EVERYTHING and it's just not sustainable!
3
Thank you, President Trump.
9
@HozeKing
Well, with all due respect, you look retired.
That is not the problem in the economy. It is your kids/grandkids paying back the trillions Trump pumped into the economy while threatening their healthcare.
2
Just admit Trump turned the economy around with deregulation and tax cuts (something Obama and his minions had refused to do). . If Obama’s economic legacy had been continued via Hilary, the GDP would still be 2% (Obama’s “new normal”) and we’d be in the same rut. Time to get rid of “Harvard law professors” and other elitists from the Presidency who know nothing about building a business and running and economy. I’ll take a businessperson with common economic sense like Trump anytime over a pedigreed elitist fawned over by insular Washington social circles who runs the country into the ground.
8
Trump turned the debt and deficit around. The tax cut, coupled with increased govt spending are ballooning the deficit—even with low in employment. That will be a problem and no one in the GOP cares.
2
@XLER - the best recent 4 quarters of GDP growth were quite a while before the 2016 election.
The elitist (Wharton grad) businessman you tout is a multiple bankrupt, whose last business venture closed with a $25 million settlement to avoid admission of stiffing students at his fake for-profit school. He has a history of hiring undocumented immigrant labor, of stiffing subcontractors, and overstating the value of his properties when applying for loans, and understating same for tax purposes.
His skyscraper in Chicago is the least-efficient large building in the city, hasn't completed necessary paperwork for taking water from the Chicago River, and still has most of its street-level retail space vacant, after a decade, in a booming downtown area. He promised professionals and business partners involved in the building a "friends and family" rate to boost sales when he needed to qualify for another construction loan, then welshed on the deals, saying he was "entitiled" to more profits.
Think twice about your examples. There's another 'family' organization that was quite successful and profitable. They were privately held and avoided proper scrutiny, too.
1
Have never seen so many people trying to explain that the economy really isn't doing well. Might it have something to do with who's president? When the economy was not this good, people were singing Obama's praises.
13
Actually no; I've been complaining about the stagnant minimum wage and the loss of purchasing power and Walmart jobs which force people into food stamps while Walmart shareholders are the richest people in the world all along, including during Obama's presidency. It will take a Democratic Congress to fix this.
1
Neil, how would Prof Krugman feel about that? LOL.
7
@William Tennant This has got to be real disappointing news for lots of people (Krugman, Biden, et al).
1
The problem with this thinking is that the author is assessing the economy as a single snap-shot in time. What economists didn't think possible was for an administration to be so irresponsible as to goose the economy with a $1TRILLION hole in the deficit for partisan political purposes.
So yeah, the economy is great now, but when the bills come due, and they will, the suffering of the payback is going to be intense.
21
I am always curious in what fields we are experiencing growth, but that never seems to be part of the dialogue. Im assuming this economic boom is , in large part, result of environment deregulation. Again, its money first, without looking at the large and dangerous picture. Suicide rate for youth is enormous, because it is our youth that know they have no future with oceans becoming toxic plastic soup, and the animal and insect population in massive decline. But hey, the great American will be buried in the toxic dump (earth) clenching their dollars.
8
Domestic price inflation is now largely driven by factors outside the U.S. economy. Unlike the 1970s, it's more possible now to have a disconnect between robust domestic activity (and asset prices) and the cost of imported goods. Another big story here is the shale boom holding back energy prices.
Service inflation is wildly higher for things that are domestically sourced. Look for a moment at medical care. Or private education.
These emerging gradients are one of the most complex, fascinating, and nuanced stories of my adulthood. They tie to things like employment and labor-force participation. The changes have left our country perplexed. No politician has done a good job explaining these shifts to the public.
5
Doesn't look like the Fed understands this either. Trump seems to be correct that they worry too much about inflation...Giving bankers regulatory power, helps bankers, not so much the rest of us....If the Fed hadn't been foolish, the economy would likely be growing faster!...
1
What's being produced? Who's selling what? To whom? If this is now a "service economy" (which is what many of the omnipresent "they" call it), are we exporting haircuts or whole barbers?
'Tis a puzzlement. And to think, all those years studying economics.
2
This is the Trump Las Vegas casino-style economy - spray nitrogen on the desert grass that is burning up in the sun, irrigate the hell out of it, and then say See! Look how green my lawn is!.
The bill always come due when you can't grow anything on your toxic land. But we're a hopeful bunch.
6
This may be true in pertain parts of the country. But in Fairfield county Connecticut, recovery is still off. Take a look at town centers and empty stores, empty commercial buildings, and the very depressed real estate market in Greenwich and New Canaan and elsewhere in this county. Prices are the lowest yet and foreclosures on the rise. I think economists should study how student debt is affecting growth of ownership of millenniums. In their age group, baby boomers were heading to the suburbs, making Wall St money, and investing in a community. Low paying jobs may be increasing, but question the salaries and debt at the college educated end.
3
Well, enjoy the party that the 1 trillion dollar tax cut further stimulated. Just wait until the bill comes due
6
The simplest explanations are often correct and the explanation here is that the numbers are wrong.
1. The official unemployment rate is not a good measure of the jobs picture. The participation rate is still low. The ideal situation is for a person to be able to work one full time job with enough salary and benefits to support themselves or their family. For millions, this doesn't happen. They need multiple jobs just to barely get by. There have been huge spikes in the disability rolls and in many areas teenagers can't get jobs because the jobs they used to do part time are now filled by adults trying support families.
2. Inflation is not low. In California, electric, gas and water prices are up 40% or more in the past five years. Health insurance, out of pocket medical costs, college costs- all way up. Car insurance up. Food prices up. Housing prices- skyrocketing. Literally everything costs significantly more. Where are they getting this 1.6% from?
9
@AJ 1.6% due to decreases in many other goods. It's a weighted average, and YMMV due to the products you are purchasing.
1
Lets see some detail on what these jobs are. Are most of these just second or even third jobs for the underemployed and underpaid that they need to work just to provide for their family's basic needs?
5
I am so sick of all the reporting on the "economy", which the media seems to think is still reflected in "markets" and jobs.
The International Mafia 0.01% Robber Baron/Radical religion Good Old Boys cabal control it all. Statistics no longer have meaning - they are all manipulated.
Their operatives will be voted out in November. Get ready for a huge, manipulated global meltdown to try to "prove" democrats can't govern.
WE THE PEOPLE who do not want OUR lives and countries destroyed had better step up and prevent it. I have faith that there are still enough Socially Conscious, moral/ethical, sane BIG investors to help us stop them.
2
Much of the recent expansion is based on defense spending (which Trump controls at will) and his manipulation of the Fed (which he has influenced improperly); in other words, a lot of what we're seeing is as phony as his businesses. Let's just hope this hot air balloon has a relatively soft landing, unlike his bankruptcies, which left workers holding the bag. Then let's fire him in 2020.
3
All I know is that I cant pay all of my bills and I live a frugal lifestyle while billionaires and millionaires debate just how many houses that they are going to own and have to offshore their money to hide it from the taxman. The old economic models no linger fit our banana republic.
8
As a social scientist it always strikes me as odd that the general public seems to view economics as an exact science — even when economic theory repeatedly fails to accurately predict human behavior and the real world over and over and over again. It’s time to acknowledge that economics is not “above” any other social science, and for politicians to turn to sociology, anthropology and especially qualitative data in order to answer some of the “why” and “how” questions.
Like how has the economy evolved over time and why are such models no longer relevant? Why are employers not increasing wages even as job openings must increasingly be left vacant??
136
@RCosta
Haven't you read - employers ARE increasing wages to attract and retain workers.
4
@RCosta
Where do you think this "perception" on the part of the general public -- that economics is some kind of "exact science" -- comes from ???
Could it have anything to do with the claim from economists themselves that it is an "exact science" --
a blatantly specious claim "buttressed" by the completely arbitrary use of "equations and graphs" to prove any number of real-world ridiculous propositions ???
Economists have been running this scam on the rest of academia, and the general public, since the end of World War II,
when they dumped POLITICAL ECONOMISTS like Keynes and Schumpeter, in favor of the fantasy world of "Assume a can opener ... "
The Phillips curve has been VISIBLY outmoded since at least the 1973 OPEC oil price revolution,
when the US economy experienced BOTH high unemployment AND rising prices -- the dreaded stagflation ...
Somehow, this real world experience never managed to penetrate the intellectual defenses of the economics "profession" --
or the math-intimidated other social "sciences" like politics / sociology / anthropology
In a real way, these disciplines have themselves to blame for the fact that economists make MUCH higher salaries than they do
They've allowed the "graph and equation" scam to intimidate them into accepting economics as a "hard science"
Frankly, the general public seems much less impressed by the "exact science" of economists than other academics
The Phillips curve has been disproved since 1973 -- some 45 years ago
7
@Dr Dave
Statistically, macroeconomics is descriptive rather than analytic. This is because sampling cannot be done, unlike psychology, biology, chemistry, and most areas of physics.
However there are still millions of Americans who are struggling to make ends meet. In many households both parents and all the teenage children have jobs. Elsewhere I just read an article stating that in 10 years about half of our senior citizens will not have health insurance or a place to live. There is a lack of affordable housing in most of our major cities as well as our small towns. What is the real story here? The struggle is real. Also saw article about college students who have to choose between food and tuition
4
We have a temporary job market that is booming with desperate eager workers. They can create endless temporary jobs and we will still need even more jobs. They will fill even more jobs in 3 months, because it is a revolving door of employment. They can call it a new position, because it is not really filled yet. Perhaps reporters could step away from behind their desk computers and go outside and talk to some of these folks. No salary increases. No bennies. Perfect for companies and still looks great on paper.
4
Booming jobs? Not if you're over 50, 60!! You're supposed to become one of the "seniors" and retire already! We need to change the "senior" label paradigm...
2
The invisible hand taketh, the invisible hand giveth.
And I speaketh of not the free market.
The American economy is nothing but free.
The Trump miracle. Put a successful businessman in the role and see what happens!
2
@William This is one instance where saying, "Thanks, Obama!" would actually be appropriate.
You're being bamboozled.
2
Partly, this is funded by the low cost of fossil energy and the 'chinese hoax'. Later, after sea levels have risen 6 feet, I'll bet those unlucky schlubs will have a terrible economy, which rightwing media will reliably assign to 'socialism'.
1
Lets ask a different question. If Hillary were president would we have a better or worse economy?
2
@Alex As much as I wish Hillary were president instead of Donald, there’s no way to know. It’s extremely difficult to prove a counter-factual, or make it a moving argument for anyone who’s not already partisan.
1
Whose wages are rising? Not mine
4
The boomers, me included, are existing the workforce in significant numbers leaving behind their places in the workforce for others to fill. I wonder what a curve showing the total numbers of workers over time would show. I think it is in decline. Combine that with the nature of the new jobs appearing, the gig and temp economy, and things may not be quite as rosy for the American worker if the unemployment numbers are taken alone as the measure of healthiness.
1
Low inflation? Have you seen the cost of housing in any of the cities experiencing high wage job growth? The metrics need to be modified to the reality of today which is stratified markets. By region and income (and maybe age).
8
If only Trump and acolytes had the grace to include Obama in their victory laps.Not a strong point.
The farm economy is in depression. Latter day sweat shops in Vietnam won't do much to change that.
The stock market?
Yet this also ignores the underlying weakness that Trump has introduced: record federal debt, record federal deficits, and periodic monthly record trade deficits. This is rather like selling the family silver simply to pay the electric bills. The underlying fundamentals show the US economy is teetering on the edge of a disastrous crash.
1
Thank you President Trump! I am sure Republicans and Democrats alike wish you well in making America great again!
5
If the economy tanked, Trump would get the blame. It works both ways.
3
Unfortunately the employment numbers don't capture the entire story. Yes; there are plenty of low-paying jobs out there. When one needs to have more than one job to make ends meet, then it means something is not working. There are more homeless families, higher healthcare costs, higher rents, etc. than I remember.
9
The one, major, element that this article ignores is participation in the work force. Participation has been steadily decreasing for a long time and the Great Recession brought participation to all time lows. It effects the unemployment rate pretty dramatically. A very low unemployment rate, with a relatively low participation rate, is a new form of fundamental and may be what has brought us to a new mysterious place in our economy.
5
@Michael
That's not entirely accurate. The participation rate was dropping significantly during most of the Obama administration, but seems to have largely stabilized during the Trump administration and ticked up at times (Google it and pull up a graph showing the last ten years, and you'll clearly see what I mean). Participation has dropped in this last report, but given how volatile that number is and the fact that the economy is producing jobs at a really healthy clip with wage growth at a ten year high, I think the recent reduction is a blip and will not turn out to be a trend. But I 100% agree with you that this is a very significant data point that explains a lot. In my view, it's one of the most important data points out there and should be talked about as much or more than the unemployment rate. When you have people dropping out of the workforce while still at working age, it's a really bad sign about both the present and the future because it implies that people have essentially given up, and the longer one remains on the sidelines, the harder it is to get back in. It's a terrible thing to be on the sidelines when you just want to be in the game.
2
This is an entitlement state. Everyone makes choices. Far too many people on the dole who are faking or self victimizing to get checks for nothing.
2
RE: "the Phillips curve — the relationship between unemployment and inflation — has either changed shape or become irrelevant."
Well, it's not magic. There is a an underlying reason. The fact that "the relationship between unemployment and inflation — has either changed shape or become irrelevant" shouldn't be counted on as permission to do anything you want and all will work out, unless we under what the reason(s) are. We may have just gotten lucky.
One thing I will say is, that in regards "average hourly earnings continued to rise at a steady rate — up 3.2 percent over the last year." is that 3% is just beginning to catch up after years of no or little growth and it is a piddling increase for average workers as compared to the those in the high income brackets which saw continued growth all through the last few decades while the rest experience wage stagnation.
1
It’s great news. And I will admit it is not the disaster I feared when you admit that the 10-year recovery did not start in January 2017.
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I suppose it is the 1990s all over again. Another reason to always discount the "it's different this time" proclamations.
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I'm beginning to believe you economists really don't know what you're talking about. As for Trump Inc. - well what can one say after reading his history as a 'business man'? His only real success was in television and the sale of his name. As a retired ecologist I am dismayed by your ignorance about the real world.
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If Warren or Sanders is allowed to destroy our economic recovery the DNC will never recover from their punishment at the ballot box...
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Little is understood about this moment.
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Amazing what throwing $1.5 trillion at the economy will do.... now about those deficits and no way to pay for them - 0h that’s right we are going to gut Medicare, Medicaid and Social Security!
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For certain this is not good for the american socialist movement.
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@clarity007 Young relative getting sick and your medical costs soaring beyond what your insurance will cover is not good for anyone. Also all kids having access to to a top notch education is very good for the economy.
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