Democrats rooting for a recession to torpedo President Trump’s bid for reelection have had their hopes dashed yet again.
The latest jobs report from the government on Friday showed a continued strong economy, with employers adding 130,000 jobs in August and wages growing at an annual rate of 3.2%. The overall unemployment rate held steady at a historically low 3.7%.
The jobless rate for black workers last month fell to its lowest rate since the government began keeping track in 1972 — 5.5%. The rate for black women was even lower, a record 4.4%.
The unemployment level among Hispanic workers also fell in August to 4.2%, equaling a record low set earlier this year.
In terms of equality, the U.S. economy has never been better. The gap between white unemployment, 3.4%, and black unemployment is now the smallest in history.
The total number of Americans considered employed rose to a record 157.9 million.
If nothing changes, how does a Democrat campaign against Mr. Trump’s economic record next year? Front-runner Joseph R. Biden, the former vice president, still hopes that voters will credit former President Barack Obama for the strong job market.
“He inherited a pretty good economy from Barack Obama — just like he inherited everything in his life,” Mr. Biden said of Mr. Trump in New Hampshire on Friday. “And now he’s in the process of squandering it just like he’s squandered everything else he’s inherited.”
Like most of his rivals, Mr. Biden is banking on the president’s trade war with China causing an economic slump within the next 12 months.
“We’re teetering on a recession,” insisted Mr. Biden, who asserted that the looming downturn is causing the president to become “more erratic.”
White House economic adviser Larry Kudlow said the August job growth was “a mediocre number.” But he told reporters to check “under the hood,” citing an increase of 571,000 workers in the civilian labor force and calling that “a blockbuster report.”
Asked about soft manufacturing and mining job growth, Mr. Kudlow replied, “These numbers ebb and flow. They roared, now they’ve kind of stabilized. I think they’re going to roar again.”
Mr. Kudlow also said that he expects legislation known as “tax cuts 2.0,” which would make permanent the individual tax cuts of 2017, to be introduced in Congress during campaign season next year.
People who see signs of a recession on the horizon point to job growth missing the expected target of 145,000 last month, and the hiring of 25,000 temporary Census workers as part of the gains in August. Job growth this year has averaged 158,000 per month, down from last year’s average of 223,000 per month.
The White House said an economy that has been expanding for 122 consecutive months is bound to fall slightly short of monthly projected job growth occasionally.
“Considering the unprecedented length of the expansion and the low unemployment rate, continued job growth at this rate is outstanding,” said the White House Council of Economic Advisers. “In August 2019, just over 6 million people were unemployed, compared with more than 14 million in July 2009 at the beginning of the economic expansion. The August employment data demonstrate that the American economy remains strong, with robust wage growth, a low unemployment rate, and strong job gains.”
Economist Joel Naroff of Holland, Pennsylvania, said the softening in job growth “should surprise no one but it doesn’t mean the economy is headed toward a recession right away.”
“The details are hardly negative,” Mr. Naroff said in his monthly note. “Health care, professional and technical services, finance and construction all posted solid increases in payrolls. Manufacturing was up a touch as well. But retail keeps shrinking and transportation and warehousing, which were expected to lead the way, has been largely flat lately. That may be an early sign that the slowdown is gaining steam.”
Still, he said, “we are adding workers at a slower pace that is more consistent with the expansion. But it is clearly enough to keep the unemployment rate from rising. Thus, while this is not a very good report, it is hardly a bad one, especially given the rebound in earnings. Households still have the income to keep spending and I suspect their level of confidence, which has been shaken by the trade war, will likely either stabilize or slow its decline.”
Mr. Kudlow pointed Friday to a new round of trade talks with China that will take place in Washington in October, saying the administration wants “near-term” results from the negotiations.
Despite the uncertainty from the trade war and the lower-than-forecasted jobs report, stocks closed slightly up on Friday, wrapping up a second consecutive week of solid gains.
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