March 9, 2018
The February Jobs Report was released this morning and it was in short…fantastic. It doesn’t really get much better than this in terms of macroeconomic results and setting up the US for continued economic expansion. Non-farm payroll increased by 313,000 overall blowing away the consensus estimate of 200,000 with a strong increase in the labor participation rate while the overall unemployment rate remains unchanged.
This throws light on the fake data produced by the Department of Labor during the Obama administration that had discounted long-term unemployed workers from the unemployment rate. The increase in the participation rate along with the unchanged unemployment rate means that many previously discouraged workers are now coming back into the workforce which increases the overall employment. Most surprising piece of data in the jobs report this morning is the increase of 50,000 jobs in the retail sector. This is in part attributed to the strong growth at companies like Amazon.
Some in the MSM mainstream media instead are pointing out that the wage growth is muted. However, that misses the point as the real fear is the inflation rate and the low growth of wage rates supports the Fed taking a lower trajectory in the raising of interest rates. Historically, the Fed raising interest rates to fight inflation have resulted in downturns in the economy. The market is celebrating this fact as a slower rise wages with so many people returning to the work force may result in lower in interest rates and which translates to stronger long term profits.
Another key economic point is that for all the talk that the tariffs on steel announced by Trump would result in a global trade war as the details get worked out and analyzed, it turns out the impact on the overall economy and economic activity is minimal. The Trump tariffs may actually have just saved the US steel industry from complete extinction and given them a lifeline to modernize and upgrade their production to become more competitive. At the end of the day, Trump is not pursuing tariffs for sake of tariffs but it is a negotiation tool to get the steel dumpers to agree to deals on restricting steel dumping practices engaged by state sponsored industries.
What you probably wont hear from the MSM is the fact that the strong economy and employment numbers are directly attributable to Trump’s economic policies. There is near unanimous agreement even among economists (except for the media pundits) that the Trump tax reform along with reduced regulatory activities and his infrastructure program has significantly pumped the economy. Instead the MSM and the left is preferring to focus on creating more fake news and chasing shadowy, politically motivated allegations of sexual misconduct Trump might or might not have had while a private citizen with some porn star or how suddenly the MSM feels that tariffs on trade violators are bad despite this having been part of the platform of the left for decades.
