Rock­ing the U.S. econ­omy Pos­i­tive in­di­ca­tors should calm the emo­tional see­saw

The Washington Times Weekly - - Editorials -

Love makes the world go ’round, it is said, but it’s money that greases its spin. When news ar­rives of a weak­en­ing econ­omy, some look­ing out through the wrong end of binoc­u­lars can mis­take a fly in the oint­ment for a wal­let-rav­aging be­he­moth. With proper per­spec­tive, there can be lit­tle doubt the U.S. econ­omy un­der Pres­i­dent Trump is on full throt­tle, and the roar means ris­ing pros­per­ity for Amer­i­can fam­i­lies.

Faces turned crest­fallen last Thurs­day when the In­sti­tute for Sup­ply Man­age­ment (ISM) an­nounced that its non­man­u­fac­tur­ing in­dex dropped 3.8 points in Septem­ber to 52.6, the low­est read­ing in three years. With the ser­vice in­dus­try be­ing the na­tion’s largest business sec­tor, a slow­ing trend re­newed money media mur­murs of a com­ing re­ces­sion, par­tic­u­larly with a sim­i­lar slow­down cur­rently un­der­way in Ger­many, Europe’s largest econ­omy.

Just as fin­gers drummed ner­vously around the New York Stock Mar­ket, CNBC added to the gloom, re­port­ing, “Amer­i­cans’ at­ti­tudes to­ward the econ­omy took a sharp turn down­ward in the third quar­ter, ac­cord­ing to the CNBC All-Amer­ica Eco­nomic Sur­vey, with just 23 per­cent be­liev­ing the econ­omy will im­prove in the next year, the low­est level of op­ti­mism in three years.” On the heels of the dis­mal ISM in­dex, CNBC fur­ther noted, “Stocks de­clined for a third day on Thurs­day af­ter a read­ing of the ser­vices econ­omy came in much worse than ex­pected.”

Trend lines can prove faulty when ex­tended from the present into the fu­ture, which is why vir­tu­ally ev­ery mu­tual fund prospec­tus ad­vises, “Past per­for­mance is no guarantee of fu­ture re­sults.” The mar­ket sell-off that an­a­lysts re­ported in the morn­ing evap­o­rated dur­ing an af­ter­noon turn­around that left the Dow Jones In­dus­trial Av­er­age up 122 points by the clos­ing bell. That’s the sort of “de­cline” that the 54 per­cent of Amer­i­can fam­i­lies who own stocks would wel­come en­thu­si­as­ti­cally.

Like kids on a see­saw, good news and bad news rock pub­lic sen­ti­ment up and down on the eco­nomic play­ground day in and day out. Forty-eight per­cent of re­spon­dents in the CNBC sur­vey be­lieve the econ­omy to be ex­cel­lent or good, down a smidgeon from 51 per­cent in May. At the same time, 50 per­cent turn thumbs down on Mr. Trump’s han­dling of the econ­omy, the worst rat­ing of his pres­i­dency. It just goes to show that for some, ev­ery sil­ver cloud has a dark lin­ing.

Those who can’t seem to find some­thing to like in the cur­rent state of eco­nomic af­fairs may have missed the na­tion’s monthly em­ploy­ment num­bers. The U.S. Bureau of La­bor Sta­tis­tics re­ported Fri­day that pay­roll em­ploy­ment in­creased by 136,000 in Septem­ber, driv­ing down the un­em­ploy­ment rate to 3.5 per­cent, the low­est since 1969. The num­ber of Amer­i­cans gain­fully em­ployed reached a record 158.3 mil­lion.

Par­tic­i­pa­tion in the pros­per­ity ex­tends through all pop­u­la­tion de­mo­graph­ics. The un­em­ploy­ment rate for white Amer­i­cans reg­is­tered at 3.2 per­cent and 3.9 per­cent for His­pan­ics. For blacks, the rate re­mained at its record low of 5.5 per­cent. Asian un­em­ploy­ment beat all cat­e­gories at 2.5 per­cent. Men logged a 3.2 per­cent un­em­ploy­ment rate, job­less women mea­sured 3.1 per­cent and teenagers look­ing for work were pegged at 12.5 per­cent.

Un­sur­pris­ingly, the pres­i­dent couldn’t help but point out the blunt con­tra­dic­tion be­tween the stel­lar suc­cess of his eco­nomic poli­cies and the dogged ef­forts of Democrats to re­move him from of­fice: “Break­ing News,” Mr. Trump tweeted. “Un­em­ploy­ment Rate, at 3.5%, drops to a 50 YEAR LOW. Wow Amer­ica, lets im­peach your Pres­i­dent (even though he did noth­ing wrong!).”

The pres­i­dent has a habit of stomp­ing where oth­ers fear to tread. His hard­nosed trade ne­go­ti­a­tions with China have pe­ri­od­i­cally roiled stock mar­kets and con­trib­uted to alarm that a fail­ure of the two largest economies to reach a deal could bring on a global re­ces­sion. China’s trade team is slated for a fresh round of talks in Wash­ing­ton this week.

White House chief eco­nomic ad­viser Lawrence Kud­low told Fox News Fri­day that re­cent signs of good will on both sides are rea­son for mea­sured op­ti­mism: “Pres­i­dent Trump has said he’d like to have a deal, but it has to be a good deal cov­er­ing all the is­sues, the [in­tel­lec­tual prop­erty] theft and the forced tech­nol­ogy trans­fer and, of course, the tar­iffs.”

Since Mr. Trump took of­fice, U.S. house­hold an­nual in­come has risen by $5,000, ad­justed for in­fla­tion, ac­cord­ing to eco­nomic con­sul­tant Stephen Moore. The bot­tom line is Amer­i­can fam­i­lies now have more money to live the lives they love.

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