Economy under Trump is growing but not for everyone, Booker says

[TexasTowelie]

WASHINGTON — The lowest unemployment rate in a half-century and millions of new jobs have Americans cheering Donald Trump’s economic record, but U.S Sen. Cory Booker says the president shouldn’t take a victory lap just yet.

“Ask people if the numbers that Donald Trump touts are really making a difference in their lives,” Booker, one of more than 20 candidates seeking the 2020 Democratic presidential nomination, said Sunday on CNN’s “State of the Union.” “They’ll tell you, ‘I have to work two jobs just to try to keep myself in housing.’ Americans are struggling.”

In a recent CNN poll, 56% of Americans approved of the way Trump was handling the economy, with 41% opposed. The government said Friday that 263,000 jobs were created last month, and the unemployment rate dropped to 3.6%.

Booker, D-N.J., said Trump was taking credit for an economic recovery that began under his predecessor, President Barack Obama. He said Trump pushed through a tax law that gave most of its benefits to the wealthiest Americans.

Read more: https://www.nj.com/politics/2019/05/economy-under-trump-is-growing-but-not-for-everyone-booker-says.html

[Mr.Bill]

1. Obama was handed a 10% unemplyment rate when taking office.

When he reduced it greatly over his term, Trump and many others were saying "well yeah, but the real unemployment rate is actually 25-30%. Suddenly the figures arrived at by the same people with the same methods are the gospell.

[DownriverDem]

2. No it isn't

I don't just vote the economy either. We have lost so much since trump moved into to WH.

[kurtcagle]

3. Late stage recovery and demographics

Trump lucked into a demographic gift. If you look at the BLS numbers, one thing that's very noticeable is that the participation rate continues to drop, even given a couple of months of exceptional numbers. Historically, when jobs are plentiful, the participation rate usually rises, as people who had given up looking for work start job hunting again (which can actually cause the unemployment rate itself to rise a bit as these people now show up again in those numbers).

What is happening at the moment is actually due to two causes - first, Baby Boomers are now retiring in record numbers, because the Boomers are hitting the peak numbers of people turning 65 (and critically, you're also seeing those people now entering into their seventies realizing that it is harder for them to stay employed than it used to be). This means that jobs are now opening up that have been "clogged" for some time.

The other thing that is happening is that Trump's immigration policies are having a strongly detrimental effect upon hiring foreign workers, which is, in fact, forcing employers to look closer to home. This was a given. The downside to it is that we're now reaching a stage where many of these same jobs are also getting close to (or are in fact well past) the point where they can be automated. This places a demand upon people who can set up automated systems, can repair them, and can program them, but this is a far smaller number of people than are going to be displaced.

My theory is that we're actually in the very late stages of the Obama economic boom, and that we're seeing phase switching behavior now, where the economic indicators will give some very good months mixed with periods of free falls, with the latter becoming more common than the former by the end of summer. Keep in mind that in February only 33,000 jobs were created. March was 196,000 which is still well below the 230,000 jobs that need to be created to keep up with population growth.

A final couple of notes. First, I think it's important to keep a close eye on how out of sync different organizations measures of unemployment are. Given this administration's tendency to fill key positions with sycophants, I've been worried about BLS numbers for some time (I've been predicting a recession for 2019 for a few years now, and figured back in 2016 it'd be something that Clinton would end up having to deal wih).

Also, 4.3% seems to be a critical unemployment rate - when you get below that rate, the economy has gone into recession about 85% of the time within six months. We're now at 3.6%, which makes me suspect that we're now cannibalising the job market, especially towards the upper technical end. This means that companies are unable to fill the critical positions they need, which in turn means that managers will start cutting back on programs that can't be staffed.

I think there's one other factor at play - more and more companies are simply becoming more efficient at eliminating that portion of the customer base that represent marginal returns on investment. Put another way, they are seeking out wealthier customers exclusively, and jettisoning those that aren't as well heeled. You see this with airlines. Most airlines don't really care about their steerage class customers - they don't make enough money on them to make it worthwhile to provide any amenities, because they know they have a monopoly. The only reason that they don't offer exclusively wealthy flights is because of regulation. You see this strategy in other sectors, including health care, entertainment, cars, education and so forth. As a strategy it actually creates more jobs (because there is some redundancy that mass production eliminates) but it also means that when the upscale market becomes saturated (which it is well on its way to being) then the disruptions will hit hard.

So, it's possible that Trump will be able to ride a good economy into a second term, but I am increasingly convinced that his luck will run out before the end of 2019.

[mcar]

4. He is correct