Final Obama-Era Jobs Report Released As Economic Uncertainty Grows
Earlier this week the Bureau of Labor Statistics released their jobs report for January 2017, which just so happens to mark the last 20 days of the Obama administration. As FiveThirtyEight notes the latest report is starkly different from the one released as the 44th president assumed the office eight years ago. In January of 2009 the unemployment rate reached 7.6% (it would top 10% later that year) and showed a monthly loss of nearly 600,000 jobs, which was subsequently revised to a whopping 791,000 jobs. This time around unemployment was at 4.8% — up a tenth of a point for a second straight month after falling to 4.6% in November — although non-farm payroll employment increased by 227,000, making it the 76th consecutive month of job growth the nation has seen.
All of this points to an economy that’s, for the most part, healthy and suggests that President Obama’s fiscal policies, including stimulus efforts, were largely successful. While critics have said the recovery was too slow or that it’s impossible to know for sure if a depression was actually avoided under Obama’s watch, it’s hard to ignore the more than 15 million jobs added during the former President’s tenure and that unemployment has fallen dramatically even when those exiting the workforce have been factored in. Of course, with a new and decidedly unpredictable administration at the helm, many are wondering where the U.S. economy will go from here.
A common theme among economists and other observers these days seems to be “uncertainty.” While stock markets enjoyed a significant rally after the election of President Trump, many are now looking to see the impact of the Commander in Chief’s proposed policies. Topping that list is the threat of tariffs being instated on goods from Mexico, China, and other countries. In fact the President famously touted that a 20% tariff on Mexican imports was one option for meeting his campaign promise to not only build a wall along our countries southern border but to also have Mexico foot the bill. Although that statement was later walked back a bit in the days that followed, leaks prior to inauguration day suggested the President had been evaluating executive orders surrounding the topic of tariffs.
While some are taking a “wait and see” approach to the Trump administration and how it will affect the economy, others are sounding the alarm. In addition to those warning of a potential trade war, a strongly worded post on Lombardi Letter explored the possibility of a U.S. economic collapse. Although it was written on the eve of President Trump being sworn in, it points to his “America First” policy — a phrase that actually made up a cornerstone of his inaugural address — saying, “this aggressive stance is fraught with unpredictable results, which could tank U.S. economy forecasts by throttling trade and devastate earnings expectations of many Fortune 500 companies.” They also suggest that America’s habit of overspending shows no signs of slowing under a Trump presidency, causing an economic bubble that could burst under the right circumstance.
Of course what makes the economic outlook in the Trump era so unpredictable is the man himself. Perhaps Lombardi’s post said it best, writing, “You can throw out all the graphs, figures, and statistics reinforcing any analyst forecast at this juncture because the ultimate Black Swan is about to nest on 1600 Pennsylvania Avenue: Donald J. Trump.” As a result the only certain thing in our immediate economic future is more uncertainty.