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Friday’s Jobs Numbers Were A Huge Miss

Friday’s jobs numbers came out well above expectations as the U.S. economy added 196k jobs. However, if you look into the fine print, you’ll begin to see that numbers are not everything. For example, according to the household survey, 201k jobs were lost during the month of March 2019.

Job Numbers, The Devil Is In The Details

Unlike the Bureau of Labor Statistics (BLS) survey which concludes that there were 196k job gains, the Household Survey includes all job growth and not just non-farm.

It’s possible that there were many job losses in the farming industry or even other areas that the BLS does not account for. Regardless of the losses, losing 201k jobs in a month is terrible.

Unfortunately, the bad news doesn’t stop there. According to the BLS, the economy lost 190k full-time workers last month. Furthermore, the entire 196k jobs added were for part-time workers.

Certainly not a good indicator that the economy is strong. It’s possible that businesses are cutting on cost by reducing labor hours per worker.

Perhaps the culprit is the additional labor laws, such as, minimum wage, or medical leave, that are beginning to take effect throughout many states.

More details of the BLS report, over 6k manufacturing and 12k retail jobs, were cut. However; there were gains in leisure and hospitality (i.e., hotel workers, waiter, and bartenders), low-wage education and health workers, in other words, not high paying jobs.

The first quarter of 2019 lost a total of 23k jobs, the highest since 2009, the start of the great recession.

Consumer Debt Continues Rising But Slows

If the details of the jobs numbers weren’t bad enough, consumer debt continues its rise to all-time highs. Fortunately, the month over month change continues to slow down, as consumers begin to borrow less each month.

In February U.S. consumer credit slowed, rising by $15.2 billion, lower than January’s $17.7 billion increase. Credit card debt rose to $1.061 trillion, a new all-time high.

Student loans and auto loans increased to a new high of $2.984 trillion. All total, consumer debt has now reached a new top of $4.045 trillion.

However, the slow down on consumer debt could spell bad news. It’s possible the American consumer is tapped out and are unable to continue to their credit purchases. If they stop borrowing, the debt spending based economy could undoubtedly fall into another recession.

Trump Touting for Rate Cuts

According to Donald Trump, the economy is excellent, however; if everything is so great why is he asking for rate cuts and quantitative easing? My guess is under the surface of Donald Trump’s tweets, he and his administration realize that the economy is not doing great at all.

Between the terrible jobs numbers, the slowing of consumer credit, It’s likely that Trump is afraid of the bubble popping during his first term. If this bubble pops on his watch, it’s unlikely he’ll be elected a second term.

It’s unfortunate that Donald Trump did a one-eighty on the U.S. economy. As candidate Trump was right back in 2016, when he said, “The economy is a big fat ugly bubble.” He should have stuck with his 2016 talking points because now the economy has become his big fat ugly bubble.

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