Despite solid jobs report, trade tensions, slowing global growth could weigh on US economy

WASHINGTON: While Friday’s solid jobs report bodes well for US President Donald Trump’s 2020 re-election prospects, persistent trade tensions and slowing global growth could weigh on the US economy and job growth in the months ahead, experts said.

Friday’s jobs report from the US Bureau of Labor Statistics showed that hiring surged in November, causing the economy to add unexpected 266,000 jobs, and pushing unemployment to a 50-year low. Unemployment dropped slightly to 3.5 per cent, and average hourly earnings climbed 3.1 per cent over the past year to $28.29 per hour.

US markets shot up on the news, with the Dow Jones Industrial Average rocketing upwards over 300 points by day’s end, at a time when the index is already sitting on historical highs. Experts said Trump will need positive jobs results for the next few months to clinch the elections. Historically, Americans have been concerned with the economy overall other issues, and it is that issue that is likely to win or lose the election for Trump, experts said.

“On that basis, if we keep getting such strong job numbers, Trump will have a huge headwind going into the 2020 election,” Desmond Lachman, a resident fellow at the American Enterprise Institute, told Xinhua.

But at the same time, no one has a crystal ball that can predict whether the trend will continue, and the global slowdown is a concern for some economists.

“The problem for Trump is that it is far from clear that those strong US job numbers will hold up over the 11 months remaining before the election since storm clouds seem to be gathering over the global economy,” Lachman said.

“As the IMF (International Monetary Fund) has correctly noted, we now have a situation where 90 per cent of the world’s economies are experiencing economic slowdowns,” he said.

Meanwhile, protracted trade tensions between the United States and its major trading partners also posed downside risks to the US economy.