How Strong Can the U.S. Economy Get?
Rumors of a looming recession have proven unfounded: The November jobs report was a blockbuster and unemployment has hit a 50-year low.
“I think that this report is a real blockbuster. Payrolls smashed expectations.” — Daniel Zhao, Senior Economist at Glassdoor
“It’s the economy, stupid.” Said James Carville about then-President Bill Clinton’s re-election chances in 1993, in the midst of a strong U.S. economy.
“It’s the economy, stupid.” Tweeted President Donald Trump today as he shared news about the stellar November jobs report that has economic experts buzzing.
And eating their words.
How Democrats are sick of hearing Carville’s once-popular catch-phrase, which fell so well upon the ears of the Democratic electorate during the Clinton administration. Once a mantra of celebration, it has now come to reflect the growing fear on the left that the economy, not the personal shortcomings of Donald Trump, might decide the next election.
“This is a blowout number and the U.S. economy continues to be all about the jobs.” — Tony Bedikian, Citizens Bank, head of global markets.
The announcement today that U.S. employers added 266,000 jobs in November- including 41,000 workers at General Motors who returned to work last month after a strike- has left Republicans crowing and Democrats feeling more nervous about the 2020 election all the time.
“I think it's hard not to feel good after getting a jobs report like this. The labor market is continuing to provide the key foundation for the U.S. economy.” — Robert Rosener, Economist- Morgan Stanley.
In addition to November’s rosy jobs report for American workers, previous month numbers were revised upwards as well.
The unemployment rate has fallen to a 50-year low at 3.5%. Wage growth is strong as well; 3/1% over last year.
Though some experts have dismissed a 3.1% wage growth as anemic, Amazon’s decision last year to increase its minimum wage to the $15 magic number long sought by labor rights activists and advocacy groups began a chain reaction.
Other companies trying to attract and keep workers in such a tight labor market have been forced to compete with Amazon. For example, banking conglomerate Bank of American announced recently its decision to raise their minimum wage to $20 per hour.
The current tight labor market is very beneficial for wage earners. It has also proved a boon for those demographics so often over-looked during economic growth periods. People with criminal records, older people past retirement age and people with disabilities have found gainful employment in the burgeoning economy.
“At every level of employment, it’s been super tight. I truly believe that anybody who wants to work is working.” — Yvonne Rockwell- Express Employment Professionals
In fact, there are a currently a million more jobs available than there are people to fill them. If American workers aren’t currently leveraging the strong economy to negotiate a higher salary, get more benefits or a higher-paying job, they are missing out on a tremendous opportunity.
How did financial experts and economists get it so wrong?
“In January 2017, for example, nearly three years ago, the Congressional Budget Office forecast a 4.7 percent unemployment rate as far as the eye could see, and it projected that the United States labor force would consist of 163.3 million in 2019.”
“The jobless rate has averaged less than 3.7 percent through the first 11 months of the year, and the labor force now stands at 164.4 million people.” — Neil Irwin- New York Times. November 6, 2019.
With Trump at the helm of the U.S. economy, this news isn’t that welcome for Democrats running against Trump in 2020. Nor is it particularly helpful to Congressional Democrats led by House Speaker Nancy Pelosi. Deep into impeachment proceedings against the President, frustrated by a failure to move the needle of public opinion in favor of impeachment, Trump’s success with the economy has made the drive to remove him from office seem all the more dire.
And of course, the higher you move that tightrope above the ground, the harder the task of walking it will become. The pressure to deliver the goods on Trump has never been more intense for elected Democrats hoping to keep their seats, and their majority, in 2020.
In worse news for Democrats, there really is no way to downplay the good news about the economy. Even bastions of Never Trumpers, from CNN to the New York Times have been forced to grudgingly give Trump a win on this one.
Even the New York Times, no fan of Donald Trump, had a rare bit of praise mixed in with its usual condemnations and musings on impeachment.
“The labor market’s hearty performance offers President Trump something he can brag about after he fielded criticism this week for fueling trade tensions with Argentina, Brazil, China and European allies. In Congress, Democrats laid out a plan that could result in an impeachment vote by the end of the year.”
“Many Americans, though, are more focused on expanding payrolls and fatter paychecks, and in that respect, Mr. Trump has delivered.” — The New York Times. December 6, 2019
Elected Democrats, and Democrats running in 2020, will not be able to ignore the recent economic growth much longer. Actively ignoring these gains will not help Democrats win back the working class voters that lost them the election to Trump in 2016.
The U.S. economy has revealed its potential.
If Democrats can do a better job of managing the U.S. economy than Donald Trump, now is the time to say so.
(contributing writer, Brooke Bell)