a tale of conflicting economic indicators in the Age of COVID
Unemployment dropped to 4.2% last month, which is now lower than it was in March 2020 at the beginning of the pandemic, and exactly where it was 4 years ago -- when the New York Times quoted an employment executive saying, “It’s a really, really strong economy."
Some more quotes from four years ago, when the unemployment rate was the same as it is today:
The economy’s vital signs are stronger than they have been in years. Companies are posting jobs faster than they can find workers to fill them. Incomes are rising. The stock market sets records seemingly every month.
The figures present a political opportunity for President Trump, who ran for office on a promise to revive the American economy.
The White House press secretary, said on Friday that the jobs report was evidence that “President Trump’s bold economic vision continues to pay off.”
Companies in nearly every sector are reveling in the best opportunities they have seen in years.
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What does the NYT have to say about today's 4.2% unemployment rate?
The American economy hit a speed bump in November as hiring unexpectedly dipped before the holiday season, a sign that companies are cautious about prospects for growth.
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I must conclude that, despite its liberal reputation, the New York Times loved Trump and hates Biden.
I recently told a couple friends, "The so-called 'liberal media' is not actually run by liberals, it targets liberals as an audience so it can sell subscriptions and advertisements. The New York Times is owned by a for-profit corporation that is traded on the New York Stock Exchange. It's owners benefitted from Trump's tax cuts, and will take a financial hit if Biden's BBB tax increases pass."
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The unemployment rate is low and dropping fast, a year ago it was 6.7% -- the last time unemployment dropped this quickly was 1984, when President Reagan won re-election in a landslide.
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Why aren't Biden and Democrats getting credit for this massive economic growth, for an economy that has completely recovered from the pandemic?
We could blame people's unhappiness on the highest inflation in 30 years, yes, we could. And this leads us to the other half of today's economic mystery -- with the economy growing so quickly, and with inflation so high, why isn't the Federal Reserve hitting the brakes?
The current difference between the Federal Funds rate (0.1%) and the inflation rate (6.2%) is so wide that it has only been seen during recessionary times of high and rising unemployment, such as in 1974 and 1980, when the Federal Reserve was applying massive stimulus to a rapidly declining economy. Adjusted for inflation, interest rates are deeply negative, moreso than we've seen in 40 years.
The press are acting like the economy is still sick. The Federal Reserve is acting like the economy is still as sick as it ever gets. But the low (and still dropping fast) unemployment rate says our economy is strong as it ever gets.
Are we back to normal, though? No, we still have COVID, and COVID shows no signs of disappearing. But the economy has recovered. The economy is growing so quickly that we're stoking inflation, the economy is running hot, probably too hot. But we still have COVID, so ...
Spraying more excess cash into the economy isn't going to stop COVID.
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I think we're stuck, as a nation. We want to return to normal, but we're not willing to do what it actually takes to get rid of COVID, but we've thrown so much stimulus at the economy that the economy has now completely recovered from COVID and is instead growing too quickly, but we cannot see that the economy is now growing too quickly because we still see COVID COVID COVID. We even, irrationally, blame COVID for the economy overheating.
The US economy added 210,000 jobs last month. Four years ago, the US economy added about the same number of jobs. Back then, we were overjoyed. Now, it is called "a speed bump".
Adding jobs even more quickly won't make COVID go away!
It feels like our business leaders are so stuck on thinking of the economy via profits and stock markets and job growth, that they're trying to compensate for the ongoing COVID pandemic by wanting ever-faster economic growth. But we cannot keep growing at the current pace for another year, it is impossible, we cannot push the unemployment rate down to 1.7% a year from now, it cannot go that low, because there are always a few percent of the labor market in between jobs.
We have to slow down the economy, even if COVID hasn't gone away yet.
Some more quotes from four years ago, when the unemployment rate was the same as it is today:
The economy’s vital signs are stronger than they have been in years. Companies are posting jobs faster than they can find workers to fill them. Incomes are rising. The stock market sets records seemingly every month.
The figures present a political opportunity for President Trump, who ran for office on a promise to revive the American economy.
The White House press secretary, said on Friday that the jobs report was evidence that “President Trump’s bold economic vision continues to pay off.”
Companies in nearly every sector are reveling in the best opportunities they have seen in years.
-----
What does the NYT have to say about today's 4.2% unemployment rate?
The American economy hit a speed bump in November as hiring unexpectedly dipped before the holiday season, a sign that companies are cautious about prospects for growth.
-----
I must conclude that, despite its liberal reputation, the New York Times loved Trump and hates Biden.
I recently told a couple friends, "The so-called 'liberal media' is not actually run by liberals, it targets liberals as an audience so it can sell subscriptions and advertisements. The New York Times is owned by a for-profit corporation that is traded on the New York Stock Exchange. It's owners benefitted from Trump's tax cuts, and will take a financial hit if Biden's BBB tax increases pass."
-----
The unemployment rate is low and dropping fast, a year ago it was 6.7% -- the last time unemployment dropped this quickly was 1984, when President Reagan won re-election in a landslide.
-----
Why aren't Biden and Democrats getting credit for this massive economic growth, for an economy that has completely recovered from the pandemic?
We could blame people's unhappiness on the highest inflation in 30 years, yes, we could. And this leads us to the other half of today's economic mystery -- with the economy growing so quickly, and with inflation so high, why isn't the Federal Reserve hitting the brakes?
The current difference between the Federal Funds rate (0.1%) and the inflation rate (6.2%) is so wide that it has only been seen during recessionary times of high and rising unemployment, such as in 1974 and 1980, when the Federal Reserve was applying massive stimulus to a rapidly declining economy. Adjusted for inflation, interest rates are deeply negative, moreso than we've seen in 40 years.
The press are acting like the economy is still sick. The Federal Reserve is acting like the economy is still as sick as it ever gets. But the low (and still dropping fast) unemployment rate says our economy is strong as it ever gets.
Are we back to normal, though? No, we still have COVID, and COVID shows no signs of disappearing. But the economy has recovered. The economy is growing so quickly that we're stoking inflation, the economy is running hot, probably too hot. But we still have COVID, so ...
Spraying more excess cash into the economy isn't going to stop COVID.
-----
I think we're stuck, as a nation. We want to return to normal, but we're not willing to do what it actually takes to get rid of COVID, but we've thrown so much stimulus at the economy that the economy has now completely recovered from COVID and is instead growing too quickly, but we cannot see that the economy is now growing too quickly because we still see COVID COVID COVID. We even, irrationally, blame COVID for the economy overheating.
The US economy added 210,000 jobs last month. Four years ago, the US economy added about the same number of jobs. Back then, we were overjoyed. Now, it is called "a speed bump".
Adding jobs even more quickly won't make COVID go away!
It feels like our business leaders are so stuck on thinking of the economy via profits and stock markets and job growth, that they're trying to compensate for the ongoing COVID pandemic by wanting ever-faster economic growth. But we cannot keep growing at the current pace for another year, it is impossible, we cannot push the unemployment rate down to 1.7% a year from now, it cannot go that low, because there are always a few percent of the labor market in between jobs.
We have to slow down the economy, even if COVID hasn't gone away yet.