A NATION’S PROSPERTY CAN BE DETERMINED BY ITS CITIZEN’S “STATE-OF-MIND”

…The US Economy

 

Nations around the globe are concerned about who will be in the White House next year.

 

I do not want to become a “bearer of doom and gloom”, but it is time to acknowledge the “Elephant in the Room”, and this time I don’t mean Donald Trump.

 

The “elephant” I’m referring to is the economy and the possibility of a coming recession.

 

OK, yes the unemployment has only been at a low of about 5%, (it was 4.7 percent in May), jobs have increased by more than 14 million since the Democratic president took office, so for today, all that bodes well for the current administration.

 

But the reality is that the May employment report is suggesting a slowdown and the possibly of a coming recession.  The report, released June 3 by the Labor Department, was weaker than expected. Payroll jobs increased by only 38,000, and the job creation for the previous two months was also revised down by 59,000.  Since March, payroll jobs have grown at an average monthly rate of only 116,000.  That’s half of 2015’s 230,000 jobs.

 

The point of all this is that, whomever gets to the White House by November could be saddled with the cause for the downturn in the economy.  I know, the new White House occupant wouldn’t actually be the cause, but that’s what history tells us is where the blame would be placed.

 

Now before we all start wringing our hands with worry, there could be positive reasons for the latest employment report.

 

Even though these latest report results were not anticipated, neither does it make a recession totally inevitable. It could be possible that the economy is at or near “full employment.”  It is possible that there aren’t that many more workers left to hire.  Or it might reflect the economic recovery’s patchy nature, (which is true) with rapid growth in some quarters and stagnation in others.

 

In her June 6 speech, Janet Yellen, the Chair of the Federal Reserve Board, said she was “cautiously optimistic” about the nation’s economic outlook.

 

Yellen found these many signs of strength.

 

US vehicle sales are booming at more than 17 million units annually. The housing market continues to expand. She even cited evidence of a healthy labor market, in spite of the slow job growth. The job “quitting rate”, that’s the share of workers that are voluntarily leaving their jobs, is close to pre-recession levels.  That indicates that “the workers are feeling more confident about the job market and are likely receiving more job offers.”

 

Now that’s all well and good, but right now we are hearing all the noise from Trump about the “disaster of the Obama administration”.  Trump’s false statements about how bad the shape of the nation’s economy is in today.  In addition, the idea that if he is elected there will be 5 or 6 job offers for every eligible worker.  Unfortunately, the reality is that this kind of false information is affecting the world’s economic outlook.

 

The nations around the world are all looking to who is going to be in the White House next year, and they are very concerned if it ends up being Donald Trump.

 

The truth is, what if the US has another major ”terrorist hit” such as another 9/11, or a hit such as the ISIS attack on Paris?  What then?

 

And if it’s not that, what about problems with the price of oil, or if China causes a problem in the South China Sea or……?

 

As it is, some key advisors to the Clinton political machine are already suggesting that because of the uncertainty of who will be in the White House, that is the reason for today’s weakness in job creation and also a reluctance of companies to invest in new plants and equipment.

 

The truth is that a nation’s prosperity is determined by both those detailed monthly production reports, but more important, by the citizens state of mind.

 

The next few months will be crucial in shaping the perceptions that Americans will be taking into the voting booths. Hillary's advisers need to go on offense and explain that any and all economic uncertainty is on Donald Trump's shoulders for US and foreign companies’ reluctance to hire and invest.

 

If there is even a hint of a recession, the election’s outcome may totally depend on which candidate’s name gets attached to it.

 

Think about it……..

 

Copyright G.Ater  2016