This August the US added 130,000 new jobs, down 18% from July. The 130,000 is also partially inflated by the government hiring of 25,000 workers in preparation of the upcoming 2020 US Census. It seems that the US economy is beginning to see the negative implications from the tariff war with China. However, President Trump remains confident in the strength of the current economy. Unemployment remained constant at a very low 3.7%, and earnings growth is up 3.2% from it's mark in August of 2018. Trump is trying to urge the Fed to keep the economy growing by calling for a huge interest rate cut. I do not think that the latest report from the Labor Department on the slowing of job growth is quite enough to put the Fed in panic mode, and therefore a huge rate cut from Jerome Powell and company is very unlikely. I do think that job growth will probably continue to slow due to the uncertainty caused by the trade war with China, and a global slow down, however I think we are safe from a recession for the time being,
https://www.bbc.com/news/business-49609517?intlink_from_url=https://www.bbc.com/news/topics/c1038wnxypvt/us-economy&link_location=live-reporting-story
I think it's smart that Trump is trying to urge them to cut interest rates. If the fed does ultimately cut them then more people would be willing to take out loans, and this would cause them to spend more. And we all know that if more people are spending at a higher rate then our economy may be improving, keeping in mind all other indicators.
ReplyDeleteI agree. I believe that as of now were are safe from a recession. It seems like we are almost jinxing ourselves into a recession. Yes there is an inverted yield curve, but I think a lot of people are panicking way to early because our economy is still the best in the world.
ReplyDeleteWhile I do agree that we are safe from a recession for the near future, I don't think cutting interest rates is the a smart move. I think that interest rates are already incredibly low, and whatever issues there are with growth in economy, does not have to do with interest rates.
ReplyDelete