Interesting to note how the Obama economy is strengthening Trump's chances at reelection. By the Obama economy I'm talking about the fundamental shift in American business that occurred during the Obama administration. In simplest terms Obama oversaw a shift from a manufacturing base to a service based economy.
I'm not really certain why--probably because they think it was Obama's idea--but conservatives absolutely despise this shift. Maybe it is because the sector requires higher education (a big conservative "no,no") or maybe it is because earnings in the service sector mostly float free of the sort of government interference crony capitalism requires.
Whatever the case, the roundly maligned service sector is carrying the economy right now. My conservative friends deny this--they tell me that Trump has inspired so much growth in manufacturing that what is happening is that the US is becoming a manufacturing powerhouse again.
Of course, the numbers tell a very different story. Investment in manufacturing dried up. The sector has lost jobs since the beginning of the year and it continues to shed them almost as fast a Trump tells lies
Thus, in a season full of ironies, the right-wing despised service economy which is the pride of the left could upend the left by keeping the economy afloat (enhancing Trump's reelection chances) while conservatives continue to lie about that manufacturing rebound.
Only in America folks, only in America.
1
I recently heard a comment that had flown under my radar, "the odds are good, but the goods are odd". That seems an accurate description of the unemployment data. So many reader notice that the unemployment statistics fail to describe the actual state of employment in the US. They probably are not economists and it doesn't take much formal training in economics to understand the deficiencies in the unemployment statistics.
Yet journalists with formal training in economics write about the employment prospects for working men and women in glowing terms despite those obvious deficiencies. The decline in manufacturing jobs and full time jobs in any sector with decent wages and benefits ought to lead every thoughtful article.
IMO this is a reflection of the elitist neoliberal, Republican-Lite, false belief that we live in a post industrial economy. We live in a consumer economy, an economy dominated by consumers buying goods, tangible objects made in a factory or structures built onsite by people using tools. It is the mindset that has destroyed the lives of many hardworking men and women and given us the Trump presidency.
4
"...blockbuster job growth can't continue forever because you eventually run out of workers..."
Oh, yes it can and oh no we won't.
In 2018, Trump reduced the personal income taxes of all families of four or more making $53,000 or less to zero.
Such families world wide are considered the upper middle class or rich and pay tens of thousands of dollars in taxes.
There are over 2.5 billion workers worldwide who fall in this category. Their value as economic agents instantly doubles if they can make it to the U.S. Before this economic change, the tax cut, 140 million of them were planning to move to the U.S. That now has increased to over 250 million.
The avalanche across the border is going to turn into a tsunami.
No, we are never going to run out of the number of workers necessary for blockbuster job growth.
2
The numbers- aggregate- don’t give a clear picture of the agony in the world of jobs. Good luck finding a job that pays tho rent and covers the bills, as corporations squeeze us ever harder. Many work two and three jobs and barely squeak.by.
3
Data is a plural noun, so "Data Give Hints."
1
Many words to say maybe.
1
"...if we are going to escape recession..."
Your language betrays your malevolent intent. At 130,000 estimated jobs added, we aren't anywhere close to being in an escapable recession much less an inescapable one.
We weren't in a recession in 2016 despite losing 7,000 manufacturing jobs.
We certainly weren't in a recession last month as we added 5,000 manufacturing jobs, an annual pace of 60,000.
Obama could only wish he had been so skilled.
As the Dems took over the House with their 90% "marginal" tax rate ideas, the stock market tanked $5.5 trillion. The shock wave from that takeover temporarily shook confidence, depressed capital investment with a result of reduced economic growth.
But, now the stock market has shook it off is back to projecting 4% plus growth for next year and we will soon be back to the races.
People fail to understand the Trump phenomena. His daily reality orchestration of conflict drama distracts the collectivists who would otherwise eat out our substance necessary to produce a path to prosperity for the disadvantaged. To with, we owe him a debt of gratitude.
2
@John Huppenthal You conveniently left out the "Ownership Society" debacle. It wiped out something like 13.5 trillion in wealth just before Obama took office. Do you remember?
1
Just like a few days ago, I notice Upshot commenters pining, openly or obliquely, for a recession that will send Trump packing. They hint to readers that they ought to postpone purchases or hiring in order to accomplish that.
I'd call that rather swinish, because recessions ruin people's lives, harm children, break up families, and even send to the grave people who, because they're out of work, can't afford operations they need.
If you want a change in government (something I completely sympathize with) do some work within the political system, contribute some money, or try identifying undecided voters and talk to them. Don't campaign for a recession.
Every recession is a severe recession to workers in factories, stores, or restaurants whose workplaces close.
And what about the ability of these commenters who want a recession to withstand one themselves? I gather it's pretty solid.
https://en.wikipedia.org/wiki/Noble_cause_corruption
1
Things don't look so good in the financial sector. Corporations have taken advantage of ultra low interest rates to borrow and use the proceeds to buy back their own shares. That reduced the number of shares outstanding and increased demand for shares, driving up share prices. Shareholder aren't entitled to get their money back when a corporation gets into trouble, but lenders are. Highly leveraged corporations are vulnerable. Nonbank lenders are everywhere, and their deals are starting to look like the last time. 'Leveraged loans' today look a lot like the mortgage bundles that went bad last time. They even have tranches. My bet is this is where the trouble will start. Again.
1
I'm with those commenters who wonder about a disconnect between looking at data and looking directly at people. I'm happy to see more people working, but the nature of millions of jobs in the gig economy is vastly different than a job with reasonable benefits provided by a stable employer. "Independent contractor" is a concept that renders a worker essentially powerless and expendable, based on the expectation there will always be people who need - or are desperate for - something rather than nothing.
And as many have noted, even traditional employment today comes with conditions that leave many workers falling continually behind. A condition that might be called employed but ridden with financial anxiety.
But let's assume that economic conditions generally described by Mr. Irwin as somewhat rosy continue through next November. I suspect there will be other reasons, already in ample supply, to turn out the current prez and his enablers.
3
Increased employment and wages are lagging factors, especially the latter. We could be in a recession when those two numbers are improving.
Joseph in Missoula
1
As of today, there are 422 days until the 2020 election. What will YOU do over these following days to ensure the Downfall of the Republican Militia and the person occuping our President's seat. What will YOU DO?
1
@Michael Kenny
Could a question be any more pointed?
If, like other commenters, you're pining for a recession so that Trump is sent packing, and you're hinting to readers that they ought to postpone purchases or hiring in order to accomplish that, why not come right out and ask?
Is it because that would be swinish? I'd call it that, because recessions ruin people's lives, break up families, and even send to the grave people who, because they're out of work, can't afford operations they need.
If you want a change in government (something I completely sympathize with) do some work within the political system, contribute some money, or try identifying undecided voters and talk to them. Don't campaign for a recession.
Every recession is a severe recession to workers in factories, stores, or restaurants whose workplaces close.
And what about your own ability to withstand a recession? I gather it's pretty solid.
1
It seems necessary for the media to assign responsibility for the “economy” to both politicians and the Federal Reserve Bank. In reality, as we may soon discover, neither really makes that much difference in a macro (global) scenario. Nevertheless, expect current, former, and potential Fed talking heads, as well as candidates, to assure us of a variety of actions and outcomes they want and expect. You don’t need a “black swan event” to be sure most are wrong, and what we will have, even next year, is something entirely different.
1
Trump and Republicans have given us the road map. If Dems just keep saying Trump recession depression I’m depressed with rage syndrome psychosis vote them out.
1
"What we’re seeing is a stark divergence between sectors that are intertwined with the global economy and those that are not."
In other words, Trump's Trade War is slowing those sectors of the economy which it directly affects. Of course, since all parts of the economy, here and worldwide, have some interconnection, that effect, if continued, will not lessen in impact, but increase.
Trump, meanwhile, is "doubling down on stupid" in the area of Trump Tariffs as in so many other policy areas. A recession is not inevitable. But it sure seems like Trump is -trying- to cause one...
1
@Jim Brokaw
When he had Trump's ear, Steve Bannon said that the conditions that gave us the 1930's (depression, war) were times of great opportunity for the kind of change he inspired. According to Bannon, upending the economic order is the necessary catalyst for destroying the social order and replacing it with his. Is that what Trump is doing?
Joseph in Missoula
1
What are the current elements of a “good” job? A good job used to pay enough to support a family of and provide quality health care along with a guaranteed retirement. Union representation and collective bargaining made these things possible. So, what happened to the union? Ask your local republican shill!
2
@JRB
If you've got a "gig" job, working 20 hours/week at $9/hour you're considered employed. If you've given up looking for work you're not counted as employed or unemployed. It's like you don't exist. 17.4 million Americans are either unemployed or work fewer hours than they want and need.
Joseph in Missoula
1
The Times called job growth of 172,000 under Obama "disappointing" but calls job growth of 130,000 "solid, even good" today
https://www.nytimes.com/2015/09/05/business/economy/jobs-report-hiring-unemployment-wages-interest-rates.html
They have been pulling this double standard for 5 years now
Shameful ...
4
@Marion Grace Merriweather
172,000 job growth when unemployment is 7% and labor force participation is 55% and 15 million discouraged workers are sitting at home is more than disappointing, its a human tragedy.
130,000 job growth when unemployment is the lowest in 50 years, when welfare benefits are the equivalent of a $60,000 job, when labor force participation growth jumps to an annual pace of 7 million and when the Democrats just terrorized business with their 90% "marginal" tax rate and their multi-trillion "green" "new" "deal" is fantastic. Unbelievable really.
2
Oh just you wait, Henry Higgins.
1
The fact omitted in this piece is the connection between "production" jobs and "service jobs." As a recent interview with farmers who are under water pointed out, because their incomes are going down they are not buying new equipment or spending money at the local stores. And there is no indication this situation will change. As another example, if the Republican attack on the Affordable Care Act succeeds in the Republican Supreme Court, hospitals in rural areas will close and thousands of well paying health care jobs will be lost. And more people will suffer and die without care. Funny how sick people don't spend money at stores or fast food joints. People who have no money don't buy "services." I'm sure there are many more such examples, but the fact is that with significant parts of the economy in free fall, it is very predictable that the rest of the economy will fail as well.
10
@Eero
Until the Affordable Care Act, the life expectancy of Americans went up every single year.
Now, down four years in a row.
We are spending a trillion more per year and the productive output of medicine is lower than ever.
Why? We look more and more like Europe where they have 1/5th of our MRI machines per capita. Where they use outdated medical procedures. Where they invest 1/3rd of our investment in healthcare research.
Where their death rate from breast cancer is 40% higher than ours.
2
I can only speak from my own experience, which is that my income has not gone up for a year and a half, while my expenses have grown (mortgage payment, and I have to contribute more to my defined benefit plan because those overseeing it made mistakes in investments). Thus I have cut back on spending and saving for retirement. The lack of a union means I have no leverage to command a raise from my employer, the top executes of which are rolling in dough. When is this country going to move from greed-based to civilized?
15
My goodness, we must have a very stable genius in the White House for all these good things to happen. Hundreds of rounds of golf followed by cheeseburgers, tweets and more tweets seem to be the answer to good governance. The "Trump Era" is truly upon us. All those other Presidents just wasted their time going to meetings and trying to understand things. Of course they didn't have Fox news to explain the world and Mike Pence and Mitch McConnell to kiss parts of the body that shall remain unnamed.
9
@terryg
Real disposable personal income increased $597 billion in 2018, 240% of the $244 billion in 2016.
The bottom quartile received the largest pay increase of any quartile and their largest pay increase since 2005.
The combined total employment of Blacks and Hispanics set ten all-time records in 2018.
Lowest unemployment rates ever recorded for women, Blacks, Hispanics.
Let's all chip in and create a permanent endowment for golf and cheeseburgers for the presidency.
2
There is a huge difference between how our economy has traditionally operated and today. The rise of the "flexible economy" has been characterized by Uber, Lyft, AirBnB operators etc who are counted as "employed" in surveys. However, these jobs have very few benefits and are very unstable. When consumers start cutting back and begin walking, taking public transport, catching rides with friends etc those jobs will quickly vanish. All the folks who bought brand new cars thinking they would for pay them by working for Uber and Lyft will start defaulting on their car loans. This will have a rippling effect on the banking system and quickly accelerate a failing market. If you want to know when the recession has hit, keep an eye on these jobs - they are the real canary in the coal mine.
6
@Mark from Georgia
All the more reason to keep the Democrats with their 90% "marginal" tax rate and Warren with her 70% capital tax rate as far away from power as possible.
These two proposals alone would wipe out over 40 million of the jobs you are talking about. That's before the "ripple" effects.
2
At one point I thought Trump would drop the tariffs war with China (or Jina, as he says), lose but call it a victory; his fans who are illiterate beyond Fox would believe him and the economy, which is chugging along, would be fine. But now I'm not sure. All bets are off when the man calling the shots is in clear mental decline, doesn't really understand the role of the Fed or the economy or tariffs to begin with. Sure, he wants to win the election and to do so he needs a strong economy -- which Obama gave him. But he's done everything in his power to weaken it. And it just may work.
9
@Andy
What are you going to say when economic growth kicks up to 4% in Q1 of 2020 despite the trade war being even more intense?
Krugman and his economic "ideas" have trapped 570 million people in Latin America, one billion in subsaharan Africa, a billion in China and a billion in India in subhuman poverty. No running water, no electricity, no cars, little food.
2
I never ceased to be amazed by economic writers like Mr Irwin who praise the job market as "pretty solid, even good," and gushing over the "whopping" number of adults who got jobs, yet fail to grasp the quiet desperation of the average American.
Mr Irwin claims we're in "something of a sweet spot: Pay is rising faster than consumer prices.."
Yet Americans cannot pay their deductibles for their over-priced insurance policies; Americans increasingly are saddled with crippling college debt, debts that cannot be discharged, even with bankruptcy, and cannot be repaid by those students who are forced to drop out due to college costs, and are doomed to decades of low-wage jobs insufficient to pay off those debts; Americans are putting off purchasing homes because they can't accumulate the downpayment due to rising healthcare costs and insurmountable college debt payments.
Is this really a "sweet spot"? Does The Times really not understand the silent desperation of most Americans today?
Judging from this column, the answer is "yes."
17
@Sean
Good whine but not true. Household debt service as a percentage of household disposable income is at its lowest level ever recorded.
You validate the research findings that humans actively seek a state of pay dissatisfaction.
We are whiners by nature.
2
Go back to the old election stand by: "are you better off now than you were when Trump was elected?"
- Wages are up on average
- There's more jobs on average
- Stock market is up (Vanguard total stock market fund)
- Housing on average is more affordable (https://www.nar.realtor/research-and-statistics/housing-statistics/housing-affordability-index)
- Inflation is under control (CPI)
The answer for the average voter: YES.
Of course there are caveats: our national debt is larger and expected to continue to expand; the economy of our trading partners continues to slow down; global geo-political stability has decreased.
But for the voter, the only thing that matters is today's view. So the Economic backdrop to presidential election at this point: positive news. Based on this we should expect the president to be re-elected. Unfortunately.
2
@deedubs
I disagree with your assumptions. People are working gig jobs. They're underemployed. Half the country has close to 0 wealth.
Joseph in Missoula
1
@deedubs
"National debt is larger..."
Nope.
Debt service as a percentage of GDP is 1.6%, less than half of its peak in 1994.
A nothingburger.
And, going lower.
In 2018, gdp growth was $1,030 billion (that's a trillion for the numerically challenged) as compared to $780 billion deficit. That means debt service as a percentage of gdp went even lower.
2
@Joseph
100% of the new jobs created in 2017 and 2018 were fulltime jobs.
"Michigan Man Of The Year" just faked a hurricane headed toward Alabama. Does anybody really think that accurate economic data matter to him or his base? It will be up to the rest of America to decide if we have had enough of "Crazy Time in America."
8
@Son Of Liberty
"...faked a hurricane headed toward Alabama..."
Nope.
The early hurricane paths clearly had Alabama in its probability zones, the same way Florida was in its probability zone but didn't get hit.
America is stumbling in the darkness. From the "Daily-Tweet-Storm" to the impulsive action of the President concerning just about everything the has an effect on the economy, it is impossible to predict anything.
The fact that the economy is still growing and adding jobs when unemployment is at all-time lows as boomers get older and eventually decide to retire and we prevent immigration to fill necessary positions - is simply amazing. The real question is: how long can this last?
At the same time the Oval is beating the War-Drums, softly at the moment, but what will that do when the President decides he needs a shooting war to get re-elected? Wars do not grow the economy - they only increase the debt while making the available workforce smaller.
6
The irony for Trump is that where the jobs are failing are the red manufacturing/mining/farming/states so while this economy may help him a bit in popular vote, will hurt him in electoral college which is his only hope of re-election.
5
@Pierre Lehu
"...where the jobs are failing..."
Nope. Don't get euphoric over one month of data.
Manufacturing jobs in 2016? Down 7,000
Manufacturing jobs created since Trump was elected? Over 500,000.
the irony is that donald trump won industrial midwest states during the industrial slowdown of 2016 on a platform of bringing their jobs back by getting "tough" on trade and immigration. his policies have only caused them more pain.
i'd argue that a much "tougher" approach would be to tell people the truth rather than what they want to hear: manufacturing employment is never coming back on a large scale, and immigrants on average work harder at their jobs and at educating the next generation.
12
@Brian
"...manufacturing employment is never coming back on a large scale..."
Nope.
Already has. Manufacturing jobs up 500,000 since Trump was elected and up 5,000 last month as compared to being down 7,000 in 2016.
Well...we do have $1T deficits. Just not the 4-5% growth that Republican promised to deliver with their tax cuts.
10
Neil,
Great Newsletter. I paid attention to the numbers but I remain concerned that the President and his economic and trade advisers resorted to unilateral use of Tariffs rather than staying within the mission purposes of the W.T.O. (GATT) to settle perceived disputes with our major international trading partners. I am not certain whether this is the best course for the U.S. to steer.
Manufacturing is contracting but I also see that we seem to have dramatically slowed in the U.S. innovation in both products and services. I could be wrong but somehow I think this is where a lot of the good jobs are gone.
I feel certain that there are opportunities in the design and development of very efficient and economical means of capturing carbon dioxide at the combustion sources and in capturing it from the atmosphere and then in the technologies that can sequester it. This should become a World utility so that our species can enjoy the future. I have an interest in several processes and patents but thus far no real investor or manufacturing interest. I feel like this is as important as air conditioning, and refrigeration to our future quality of life, but no real economic, or technology reporting.
4
There are jobs available. Here are actual (paraphrased) descriptions that are representative of many of the jobs available within 15 miles of Stowe Vermont right now.
"Must be able to deal with several information streams at once and make instantaneous correct decisions based on limited information"
"Must be able to lift 50 pounds repeatedly"
"Will be standing and walking for 8 straight hours"
"Will be able to deal with angry and even irate people"
"Must exceed all sales quotas"
Most of these jobs had a wage of less than $15 per hour.
In other words, these are difficult uncomfortable jobs with tremendous levels of responsibility with low levels of pay.
These are the jobs being created in today's economy. Jobs that people over 40 would have a hard time physically doing. Or that feature "air traffic control" levels of stress.
The only people that can afford a decent life on such salaries are 20 or 30 year-olds still living with their parents.
48
Welcome to the machine
3
A few days ago the New York Times reported that so far Trump has undermined EPA rules 84-times since he took office. I wonder if any or all of these actions have made a "false" impact on the economic numbers or on the stock market. In other words, I wonder how much of Trumps "best economy in history" is based on the destruction of our environment (not to mention our children's future).
26
@cma
The basis of the stock market upsurge since Nov 2016 is further financial deregulation, rollback of environmental protections and another tax cut based on "trickle-down" economics. All short-term strategies with disastrous long-term consequences.
WE, the American public, need to Get Smart, and become economists. The age of ignorance Must end in 2020!
3
@Michael Kenny
"...the basis is..."
Maybe its' the increase of growth from 1.6% in 2016 to 2.4% in 2017 to 3.1% in 2018.
Everything you say it true but you forgot the main point. We are at record national, corporate, consumer and student debt in trillions of dollars with an insane trade started by a. moronic, ego maniac demagogue Trump.
The piper must be paid. The end will come. The only question is how bad and when.
The two biggest economic downturns in modern history the Great Depression and the great recession took 10 yrs. of partying before the crash came.
The inversion of the curve, which is one of the biggest predictions of a recession suggest around the 2020 election.
As the old saying goes only your hair dresser knows for sure as to the timing when the end will come.
13
People fall into two categories:'glass half empty' & 'glass half full'. The NYT writers and readers seem to be half empty types. Or it could be that any news that might reflect positively on the current administration should be downplayed to support their view of the 'greater good'.
4
@John Mark Evans
Job growth was higher under Obama
Unemployment fell more under Obama
Budget and trade deficits ? Lower under Obama
It's not a matter of positive or negative, but the facts tell us that the economic situation was gotten worse since Obama left office
Which is why the Fed is cutting rates ...
21
@John Mark Evans People can also be divided into two categories in other ways; those who approach complex issues with research and learning in order to make conclusions, and those who prefer to avoid learning and instead go with how they feel at the time - the gut instinct decision process. Nothing in this article regarding the current administration is subjective; you're projecting your own biases into the situation by suggesting it is.
14
@John Mark Evans
I am a glass 1/2 full guy working 2 jobs, and never seem able to fill it to the top. I'm college educated, and still have student loans, and have 3 children all college grarduates with student loans. One working in a bank making $15 per hour, and working tables at night. The other has a MBA, and is working as an office manager at a plumbing supply making $18 per hour, and having my first Grand Child in December. The Father has a Culinary degree, and working as a Cook at a Five Guys. The only one that is doing fairly well, is my Son that dropped out of college after his 2nd year and started his own Handyman and House Painting business. As for me, I am licensed Life and Health Insurance Agent, straight commission, that needs to drive Uber to make ends meet.
So, don't give me your glass 1/2 empty, glass 1/2 full stuff. There are a lot of other people in my situation, that work hard and can't seem to get ahead. While we have to listen to 45, tell us how great this economy is, while the Republican's pass a Tax Reform Act that benefits the Rich and Multi National Companies, and still don't have a better Health Insurance Plan, other than repeal Obama Care.
33
The only thing that matters is how will the economy be doing next year at this time in PA, MI, WI and FL. The health of the economy will not make a bit of difference in at least 40 the 50 states as to who will win those states.
Believe me, I live in Massachusetts and even if the stock market doubled and every working person got a 50% raise in pay and the Democrats nominated a box of rocks as their candidate, Trump will still lose Massachusetts by 30 points. And, likewise Alabama will carry Trump by double digits even if unemployment there were 20% and they were in an economic depression and the Dems candidate was Jesus Christ, himself.
38
@Shend
I don't think most NYT readers are aware of just how red that electoral map was on election night. It was shocking to see how many states between the coasts Trump won. A sea of red. Literally.
8
@Shend
A lot of the Trump supporters in Alabama, probably think the Chosen One, spared them from Hurrican Dorian with his Sharpie.
8
@Shend
#truth
no need for any further analysis!
The economic back drop is that Trump is a check book savior and the dems want to take 95% of you money to dump into liberal programs that have been proven faulty. Sorry if the truth hurts.
4
@RS
Conveniently you ignore the deficit used to prop up the wealthy. Who exactly will pay that bill do you think?
4
@RS That is your truth at the moment (although lacking any resemblance to anything other than mindless rhetoric), but don't count on your checkbook savior too much, you will be sadly disillusioned.
@RS Sorry if I don't see any evidence presented for your truths. Perhaps I've wrongly believed that ignorance hurts.
All this healthy economic news is good to hear but I also follow the political and environmental news as much and maybe that explains why I’m so nervous about the future.
9
Interesting how many of the Democratic candidates are angling for 2024 rather than 2020. They want to build name recognition and figure Trump’s re-election will lead to an open field in 2024. That so many Democrats are staying in the race even though they have no chance to be nominated next year tells me that many see Trump’s re-election as an inevitability.
4
@Rick
More likely, they see Trump's reelection as a POSSIBILITY. I do agree with your thoughts about building name recognition. It is critical.
Bernie Sanders entered the 2016 campaign with a whopping 4% name recognition. If he had been more well known, he may have defeated Hillary Clinton---the one democrat on the planet capable of blowing an unblowable election to Trump.
These "candidates" are very wise to be looking towards 2024. This race is already down to three candidates.
6
@Rick
This is the only rational explanation for their lurch left because surely they know the country won't buy these wild progressive proposals. They must be shoring up their progressive bonafides now.
Unfortunately progressives are always the last to know and least likely to acknowledge the true popularity of their proposals.
3
@Rick Life is full of surprises and I believe you will be surprised.
"A whopping 571,000 more Americans were part of the labor force, and the share of adults who were working rose 0.2 percent."
It matters what kind of jobs were added. Are they $10.00-12.00/hr jobs or a living wage?
18
Part-time temps generally cost far less than regular full-time workers. Many of us are college graduates, some with advanced degrees whose age makes us undesirable because we drive up company insurance rates. The fact is most of us have to pay for our insurance, and that’s tough to do on a $15/hour temp wage. Housing costs are substantial even in far-flung rural areas and commutes of up to two hours extract still more. MacDonalds actually serves as a way to grab a little food off the dollar menu and I see many seniors joining me in making that choice. No fries for us!
13
The unemployment rate does not measure a huge amount of discontent, it seems to me. What about people who need to work two or three jobs in order to make ends meet? What about those who work full time, but don't make enough to live and must go on food stamps? What about those who have jobs as independent contractors or part-time workers without any benefits or job security? I'd like to see a rate that includes individuals like these with the unemployed. That would start to measure the real suffering in this country.
41
@Jeff Yes, you are right, these numbers do not reflect the state of the economy as it relates to struggling individuals.
6
The uncertainty related to Trump's trade stance is nothing compared to the uncertainty our federal government can create when it seeks to radically change major programs like Medicare. Recall how everything just stopped while companies awaited Obamacare.
Let's be honest. Socialist rantings about evil big corporations are not great for economic growth. Democrats could easily tank our economy with their radical proposals.
10
The fact is that over 40 million Americans were without health insurance in 2008 and 2009 when the Affordable Care Act was under discussion. Those who were fortunate enough to have health insurance had stagnant wages because the cost of coverage averaged $12,500/year and more for the insurance that actually paid doctors and hospitals. The annual premiums were accelerating at rates that far exceeded the inflation rate, and many small businesses dropped insurance coverages for their employees. Large employers raised the workers’ share for participants.
Medical bills were the leading cause of bankruptcies and under Republican leadership are accelerating at an alarming rate. Part-time workers are going bare and in rural regions community hospitals are closing because people have no ability to pay for their care.
It’s a puzzle to me why folks can’t wrap their heads around the notion that national health care is working very well in other developed countries. Coverage is universal and families are able to have babies. The health outcomes are better than our expensive system. Costs are spread out over the entire population and the prices are negotiated by the government. In Britain the National Health Service employs the physicians and the responsibility for training and assessing outcomes is shared.
For those people who want extras, additional health coverage for nonessential treatment is available. There are private clinics.
24
@AACNY Socialist rantings about evil, big corporations might offend your sensibilities, but workers toiling 60 hours per week at 3 jobs who can't afford healthcare (note I seek healthCARE for all, not insurance), much less abatement from debt collectors, is what offends my sensibilities. The economy has been, for the past 35+ years, a luxury rocket for the .1%; a jet for the 1%; a Mercedes for the 5%; a SUV for the 10%, and a mule-driven wagon for the rest.
22
@Rea Howarth
Obamacare was essentially an expansion of Medicaid, which accounted for 80% of enrollees. Democrats took a sledgehammer to the health insurance market just to expand Medicaid? They left a trail of detritus in their tracks. Sky high out of pockets, huge deductibles and, no, we didn't get to keep our doctors.
They squandered any credibility they had in health care, in my opinion. When I hear Medicare for All, I roll my eyes and think, "Keep your doctor."
4
My small IT firm hasn’t had growth in years and rates are half what they used to be, despite experience with leading edge technologies. Yet, the myth of a “shortage” of skilled workers is considered fact so we continue to outsource good jobs or import them via government collusion H1B Visas. If there was demand there would be an increase in opportunities and wages/rates. Not experiencing either while healthcare costs and insurance are consuming what is left of profits.
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@HowMuchIsEnough?
Under Trump, H1B visa approvals have declined 20-30% at big tech companies like Apple and Microsoft. Reining in that program to protect American tech workers was one of his earliest employment goals, and he's actually doing it.
5
@AACNY
No fan of Trump here. You are correct. Early in the campaign Trump stated that one of his plans to raise wages was to clamp down on illegal entry into our country and by reining in the absurd overuse of H1B visas.
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@HowMuchIsEnough? @AACNY @Concernicus
I agree that Trump's reduction of the H1B visa program given to the outsourcers of the tech world were overdue, but once again, like a mercantilist solution of tariffs being applied to an IP growth / core technology issue, he has no ability to address issues in an intellectually appropriate efficacious manner. You have already seen the slowdown as a shift of dev teams and system support personnel to those countries where applications are needed - China / Vietnam ... Also, the H1B visas are now being used for higher-degreed engineers w/ masters and PhDs in fields for which American engineers are not being produced in numbers needed. We are facing an intellectual and education problem that is not being addressed by a President with a fear of scientific and intellectual accomplishment abetted by others such as Dept of Educ DeVos with aligned agendas of supporting diploma mills ripping off students and not implementing correctly programs reducing student debt load (e.g., teachers serving demographics in need). ...yes, and of course, on the debit side there are the rising healthcare costs which our system is inflating at alarming rates. It is definitely a time to stop the funding of the top x.y% (take your pick; i would go w/ top 5%). This is allowing the wealth inequality to keep funding the takeover by private funding of real-estate & businesses for the continued wealth inequality of the 1%. ... whew...
So, we are seeing, again, a shift from good paying jobs in the industrial sector to not so good paying service sector jobs. This is not a good sign.
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@John Graybeard
When did the shift that started in the early 1970s ever stop?
5
The economy is doing well. Are there areas of concern? Yes, as always. Is it doing well enough to get the president re-elected? Yes, as long as it continues. End of story.
9
Goods producing, i.e. Mining, Construction, and Manufacturing represent 21 million jobs. Services providing i.e. Healthcare, Education, Retail Trade, Government, Leisure and Hospitality, etc represent 129 million jobs. Agriculture production, represents 2.3 million jobs.
To me this is where the problem lies. Too many low paying service jobs, and not enough high paying goods producing jobs that traditionally pay more. Numbers are just that, lots of job growth, low inflation, low unemployment, but “lousy wages”.
You need one of two things, or both. More manufacturing jobs, difficult in a world economy, or raise the minimum wage, and place a higher value on service jobs. And I have no idea how to get there.
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@cherrylog754
I can tell you how to get there. Elect Bernie Sanders. He was one of the very firs,t and the strongest proponent, of raising the minimum wage to $15 an hour.
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@Concernicus
Elect any Democrat.
1
I laughed out loud reading spins like "pay rose a strong 0.4 percent" or "hourly earnings were up 3.2 percent, which is something of a sweet spot"
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@Misty
Under Obama wage growth was stuck around 2%. It was a big deal, signaling all kinds of positive things, when it rose to 2.9%.
2
@AACNY Wage growth and hourly earnings are not the same thing, and Obama inherited the worst recession in over 70 years. Accuracy, details, and context are critical here.
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@Misty
Much of that wage growth has been at lower levels while STATES raised their minimum wage
2
I think the jobs numbers are an inaccurate and too rosie a picture of what is really going on in this country. Too many have given up becoming employed and millions more are employed in jobs that fail to pay a living wage. Meanwhile the MEGA rich, like Jeff Bezos are hoarding tax free wealth at an alarming rate. Six Walton heirs have accumulated more personal wealth than the bottom 40% of all Americans combined. This is not sustainable. We need a revolution at the polls of people that are willing to vote their own self interest. Enough of the WEDGE issue voting. Noone cares is Steve and Adam get married anymore and most Americans don't want Jane running down a dark alley with a coat hanger. Enough already.
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What will count is whether Trump voters are doing well economically. Working people are doing well now. Jobs are plentiful and overtime available. Low skill jobs are available, putting many people back in the workforce.
If a minor slowdown affects hiring and wages, then Trump is toast. Otherwise, look forward to another four years of devastation and bigotry.
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@Boston Barry
I think you underestimate Trump voters. Likely because they are routinely -- and mistakenly -- labeled as duped rubes, their commitment to stronger border controls and a tougher stance on China goes unrecognized. Americans understand that Trump is trying to address problems that have existed for decades. They'll not punish him for trying
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@Boston Barry
Devastation for whom?
Just so-called ‘progressives’ and their false, self-validating narratives, I suspect.
2
@AACNY It's probably because every single one of Trump's grandiose campaign promises was so absurd my dog would realize it was a lie, but over 80% of Republican voters couldn't see he was an obvious fraud. The vast majority of Trump voters were duped. Not all by any means, but far more than half. How else can you describe consistently voting against your own best interests, or for promises that are clearly false, as anything other than being duped?
4
I am not a single issue voter and there are plenty of issues this administration has failed all of us on.
Is it me? I remember the economy under Clinton as being robust. You felt it. You saw it. But this trump economy feels like a new auto tire with a slow leak. A sense of doom prevails. The enthusiasm is not there. Maybe the other issues weigh it all down.
After the painful bush recession, I am not wishing that on anybody. So many people suffered horrible consequences.
Yes, it is sadness that many of us feel. That many were conned by this incompetent president.
I guess I’ll have to vent my frustration on Nov 2020! Speaking with his supporters is to then hear the usual Obama/Hillary regurgitation.
God save America.
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@Michael
"The enthusiasm is not there..."
Yes, welfare is much more beneficial now than in the 90s.
Harder to peel people off.
But, the enthusiasm is almost as high.
Consumer confidence, as a proxy for enthusiasm, is approaching 1990s levels.
The story needs to reference the port of Oakland photo in the forecast of the economy.
4
'It's the stupid economy!'
6
This article seems based on a kind of historical status quo that may be less relevance to future events in unprecedented ways.
Surely we have data that provide estimates of economic disruption resulting from climate disruption. There is the economic impact of hurricane Katrina in 2005 or hurricane Sandy in 2010 or the increasing tornadoes, droughts, floods and fires. And now hurricane Dorian.
Data from events like these would improve economic forecasts prior to November 3, 2020.
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@A Goldstein
It is predicted that we won't have more hurricanes but more severe hurricanes due to warmer ocean surfaces. Many of the predictions about climate change, especially with respect to hurricanes, are catastrophic and just wrong.
2
@AACNY - It's fascinating that you spend so much time on the NYT without actually absorbing any of the news it contains.
I watched a news story on climate change twenty years ago and every prediction on it has come true.
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@AACNY I've read several of your comments on here, and each one is filled with subjective opinions and statements are factually inaccurate. You've literally been wrong on every topic I have seen you mention so far. That's... well it's definitely something!
4
The markets have come on the verge of collapse several times during the last 30 months. In parallel with those near-collapses, a routine has been established: following each significant dip, under the guise of "investors seeking value", many billions of dollars - if not trillions - are pumped into the markets, forcing them to move up.
Undoubtedly, those who have kept the markets up until now, have been very much cognizant of political implications of a market collapse for Trump administration. With so much money already sunk into the markets in support of Trump and his administration, it is reasonable to conclude that the markets will be kept up at all costs, until Trump is re-elected.
Once Trump is re-elected, the "supports" could be removed, which could to markets entering into a free-fall. That may cause widespread public panic, setting the stage for Trump administration to adopt drastic, if not controversial, foreign and domestic policies for the rest of the next four years.
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@Eddie B. Wow... great analysis Eddie. The only part I don't necessarily agree with is "Once Trump is re-elected," I think there is some uncertainty there.
3
@Mauricio
Well ..... the uncertainty margin in 2016, when Trump got elected, was much higher.
It is true that the next election will be different, for Trump has now a record to be judged on. But, if the economy and the markets stay healthy, and the G.O.P. manages to make the state of economy the primary election issue, I have no doubt he well get re-elected.
2
The most worrying part of your portrait of the present - and what it portends for the future is the all too brief discussion of manufacturing and resource extraction industry stalling (or retrenchment).
Service sectors are fine, for the most part. But, the manufacturing industry retrenchment portends worse outcomes than are hinted at in your piece. Some of that is compounded by the interference of tariffs on logistical planning (so much material or intermediate parts are transported across borders and oceans, from Mexico, from China). It is becoming ever more difficult to plan for the changes imposed by fiat on a previously well-running supply chain.
Service industry jobs depend, in part, on having healthy manufacturing and resource extraction industries. Slow-downs in the latter will inevitably yield negative consequences for the service sectors. By 2020? Perhaps. For those sectors are often the canaries in the coal-mine. (Pun definitely intended).
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@sandgk
"manufacturing retrenchment..."
Manufacturing increased by 5,000 jobs last month as compared to a loss of 7,000 jobs in 2016.
What retrenchment?
Manufacturing is up 500,000 jobs since Trump was elected.
That's a surge.
People need two jobs to make a living these days . The jobs Trump created coal miners jobs and they should be out of work permanently when their product finally pollutes our water and air so bad to the point of no return. Hope fully the GOP base will say enough is enough we want clean air and water also and will demand it. Wall Street says a recession is coming by the yield curve and the GOP history there has been a major recession in every GOP administration since 1945. They don’t need the media to say it is coming just read our history books.
7
Politically it could be interesting as Biden and Trump try to take credit for the good news, while pointing the finger at the bad news. The other dark side of this economy is the booming national debt; when we should be reducing deficits we are expanding them.
7
The labor report loves to emphasis the participation rate for those in prime working age 25-54. The low participation rate for 16 -24 is always * with those in school. Those working 65 and over is the largest growing age group working because of necessity or desire.
Finding the stats on 55-64 is hard. This is the first age group to be “retired early” or let go. But their decrease in income and increase in medical care before being medicare eligible is large. Plus those who do have a retirement next egg may have to draw down their investments sooner than planned. Add sequence of return risk and the consumer driven economy is not as rosy as one thinks.
That’s how this recently retired household sees it!
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@Sailorgirl
Years ago, FiveThirtyEight.com reported that the greatest predictor of how long a person will be unemployed is the state of the economy (ex., unemployment rate) when the person is laid off. Those laid off at the height of the recession fared the worst. We've had years of high unemployment and layoffs. Not a good thing.
5
Whenever I see economists predict the future they rarely talk about a couple of the huge looming problems facing us. The huge costs that will come with climate disasters, income inequality and the aging baby boomer population that will need more and more care and the restrictions on immigration that will result in a huge shortage of that care. A short term strong economy can become a disaster if you don't plan for the future. Cutting taxes on the very rich in the boom time, instead of using that money to invest in the future, is so American and so short sighted.
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The kind of jobs created should mean something. Our house cleaner (monthly) came over to get her b-day present from us. Her husband who is usually out of work brought her over in a 2015 Hemi Challenger ($25k +). Well, our newest car is a 2013 subaru that cost $19 new. There is no way he will be able to keep this car. He is a mason, who when he works, makes ok money, but mostly doesn't.
So, my point is that this uptick is allowing those who are now working to amass debt that these temporary jobs will not last long enough to pay off. Those defaults will drive us to another 2008 scenario.
18
Hi. Concerning the expensive showy car—don’t worry about who gets stuck with the bag. There is no bag. Thanks to sky high interest rates, front/ended seven year notes and tax and accounting voodoo, there is no loss, except to the buyer. Only profit to the seller and financing entities along the way.
The
The interest rates are probably sky-high and interest is front loaded over what is probably a seven year note.
Buyer probably won’t keep up his payments for more than eighteen months. Car gets repossessed. Buyer ends up with a hefty deficiency judgment probably equivalent to the sales price with all charges.
Upshot is that Buyer in essence rented the car for however long he had it and got a big deficiency judgment against him as he exited the deal
Seller has the car to resell, probably to another unqualified buyer, plus whatever his cut of the buyers payments was.
The process produces lots of tax losses, likely very convenient to an affiliated business.
All this “business” is made possible by our very own GOP governments, which lifted usury laws and permitted these long duration notes.
13
@Anne
GOP governments? According to Forbes, student loan debt is now the second highest consumer debt (behind mortgages). It's more than both credit cards and auto loans. This tremendous rise occurred under Obama. By the time he left office, student debt had increased by $1 trillion.
3
Many, if not most, political scientists believe that the numbers that really matter will be those for September 2020. That's a long way off.
When I did my dissertation on presidential popularity, I found the strongest determinant was time. Over time, the variation in presidential popularity scores decreases steadily. So we can expect Trump's popularity ratings to stay about the same.
So much for evidence. I also have a hunch that people have tired of Trump. Remember the old way of rating television actors called TVQ? That was appeal over familiarity. We are so familiar with trump.
Also, Trump, the self-promotion magician, increasingly is violating a cardinal rule of stage magic: Never repeat a trick.
It is possible, however, for Democrats to lose. You can be sure that Trump will manipulate events to his advantage. The propaganda of the deed is strong. I think, however, that Elizabeth Warren is sensible enough to counter this and to move towards the center after the primaries. She is, in her own way, doing this already. Her actual speeches are more moderate than the way she is portrayed by analysts.
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Or, another way to think about this is, the areas in which there are well-paying jobs, maybe even full time and with benefits, are not doing as well as the areas in which jobs are less well- paying, and tend to be without benefits and not often full-time.
It's a cliche by now that the unemployment rate, or even the work force participation rate, are not useful statistics unless they can be broken out by wage level and benefit status. A person working a fast food job 15-20 hours/week is counted as part of the employed as much as a full-time factory technician or an accountant. But those fast food workers are unlikely to be able to pay all their bills on those hours--and often may have to try to find an additional part-time job to make ends meet, which, if the search is successful, further inflates our employment numbers.
We really need a statistical analysis that breaks out the underemployed--those who want a full-time job but can't get one--and also breaks out wage and benefit status. But this administration would be unlikely to prioritize anything like that, even if the number weren't likely to be embarrassing for it; it simply doesn't have the interest or planning skills.
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@Glenn Ribotskyi
I agree, but this problem has existed for decades, including, if not especially the Obama era, and I do not remember Democrats ever pushing for a deeper dive analysis of the labor markets as you propose. Meaning, I do not believe that either party really wants to open that can of worms, because of the potential implications of having to accept responsibility for remedies. Minority parties love to complain about the numbers until they are in the majority.
8
@Glenn Ribotsky
It is always easy to blame everything on Trump, but this goes well past the current administration. Bush the Elder first floated the idea of no longer counting discouraged workers or those who had exhausted unemployment benefits as unemployed. Poof! Lower unemployment. Bill Clinton jumped all over it.
Totally agree with your over arching point about needing a deeper dive and new metrics. But the same holds true about measuring the health of the economy by GDP. Goldman Sachs making a billion dollars by moving one pile of digital money to another pile of digital money, has no impact on someone working in Forth Smith, Arkansas.
10
@Glenn Ribotsky, Good point about good vs. bad jobs. However, the data appears to be the opposite of what you think:
Good Jobs (+80K) - Professional Services and Healthcare tend to employ full time with benefits.
Bad Jobs (+7K) - Manufacturing, Mining and Leisure Services tend to be hourly with few benefits.
A different, and valid, argument is that manufacturing used to be the dominant sector for good jobs, now few of those who work there do well because like farming before it the march of technology has taken it from the center of the economy to the periphery.
Put simplistically: People innovate until we can make more than enough of something, after that just enough people eke out a living to keep supply in balance with demand.
Jobs may be plentiful but people working more than one job are not acknowledged in this data. There are more jobs available now but many of these are low paying requiring people to take a second or third job. If we were able to adjust the data for this, the numbers would not look so good.
67
@Paul Raffeld OP yes just go to places like Arkansas where they think $12.00 an hour a great wage. I was just there and got an offer from a very large employer to work for them at 35% of what I make in Mesa. AZ... funny
14