Monday, June 24, 2019

Sorry Chuck, the Trump economy isn't so great in much of America

I didn't watch a minute of Chuck Todd's absurd interview with President Trump yesterday, but I did see the follow-up on social media. And I took extra notice of this comment, which came right after Todd (rightfully) noted that the country's low unemployment rate is just a continuation of a 9-year trend that took up most of Barack Obama's time in office.

Yeah, you might want to look a little deeper Chuck. In fact, the US economy is slowing to mediocrity these days, and it's less than that in much of America.

Job growth in the US has slowed from the bubbly levels of 2018, with an average of 127,000 new jobs a month since January- the lowest 4-month average since August 2012. While some of that should be expected in a time of 3.6% unemployment (hard to add people when everyone that wants to work is already working), it’s an obvious slowdown in employment gains that won’t help sustain the 10-year economic expansion.

And the lower 1.58% rate of job growth doesn't tell the full story. What’s being missed by the affluent, connected Coastal media is that the allegedly strong “Trump economy” is sputtering out in much of America.

US job growth May 2018-May 2019
US total rate of growth +1.58%
15 states are above 1.58%
35 states are below 1.58%

Even more amazing, exactly ONE of those 15 states that were above the US rate of growth is located North of the Mason-Dixon line and east of the Rockies (South Dakota, and they’ve only gained 8,400 jobs in that time). (You can click here for a good bar chart that compares each state for total job growth over the last 12 months).

And worse for Trump, the Rust Belt states that gave him the win in 2016 are the ones that are falling farther behind under his presidency. In fact, the 5 states that voted twice for Barack Obama then flipped to Trump in 2016 all are short of 1% job growth over the last 12 months, let alone the 1.6% for the country.

“Rust Belt” Obama states that voted for Trump
Penn +0.9%
Ohio +0.8%
Mich +0.53%
Wis. +0.51%
Iowa +0.4%

"But Jake, isn't the stock market still booming under Trump? Aren't people's 401k's doing great?" Again, depends what you're talking about. Sure, if you look at the DOW Jones average of 30 large companies, things seem OK. But if you dig deeper into the stock market as a whole, not so much.

I'll go from the date Trump signed the GOP Tax Scam into law, on December 22, 2017, and look at the record over the 18 months that have occurred since then.

Stock market performance last 18 months
DOW Jones +8.0%
S&P 500 +9.8%
Russell 2000 (smaller-caps) -0.8%

As you can see, while the DOW and S&P by a relatively small amount, the Russell 2000 is lower today than the day Trump signed the Tax Scam, into law. It's down 12% from its peak last August 31, and after a sizable decline today, is down 5% in the last 3 weeks, and went below its (already-declining) 200 day moving average today.

A common theme with the Trump economy is that a few big gainers at the top make the overall numbers look good. But the typical American state and person is barely any better off, and they will be the ones most likely to be the first to feel the pain when the inevitable recession hits sooner than later.

It's something that's in plain sight for much of the country, but the connected, corporatist media members in the Acela Corrioor don't have a clue about it. Which is why Trump's re-election prospects may be even tougher than those Coastal media types think, as the states he can't afford to lose are falling farther behind economically.

No comments:

Post a Comment