We’re on the verge of another financial crisis, say some members of the press. Others warn that we’re nearing a recessionary nightmare on the heels of a trade war.
But that’s just not true.
In fact, the U.S. economy is stronger than ever before.
The economy is growing thanks to tax cuts, confident consumers, greater business investment in expansion and more government spending.
Plus, Analysts note the Trump Administration’s $1.5 billion tax cut and increased government spending has done a great job of shielding us from trade tensions. And, with GDP up to 4.2%, we’re living in the second longest period of economic expansion since World War II.
While the unemployment rate remained at 3.9%, non-farm payrolls jumped by 201,000 last month thanks to construction, wholesaler and professional jobs. That beat expectations for a gain of 190,000 jobs.
According to the White House:
“The pace of job growth in 2018 averages 207,000 jobs per month—exceeding average monthly gains in 2016 (195,000) and 2017 (182,000). Since President Donald J. Trump took office, 3.6 million jobs have been created, and there have been more than 4 million new jobs since the election in November 2016.”
Where the Jobs Were
Professional and business services added 53,000 jobs in August and 519,000 jobs for the year.
Healthcare jobs were up by 33,000. Over the year, that’s 301,000 jobs.
Wholesale trade employment increased by 22,000 in August and by 99,000 for the year.
Transportation and warehousing jobs were up by 20,000 in August for a total of 173,000 over the year.
Mining employment rose by 6,000 in August. Construction added 23,000 in August and 297,000 for the year. Unfortunately, manufacturing employment fell slightly in August (-3,000).
Overall, that’s solid growth.
Wage growth is picking up steam, too.
While wages were rather sluggish in recent months, the latest report is encouraging. Average hourly earnings were up 0.4%, or 10 cents in August after rising 0.3% in July 2018.
That raises the annual increase in wages to 2.9% for August 2018. It’s also the biggest wage gain since June 2009.
For almost a decade, weak wage growth had defied the economic recovery.
However, that may no longer be the case. According to Joseph Song, an economist at Bank of America Merrill Lynch, as quoted by Axios, this is just the beginning of "better wage dynamics," and it could continue in coming months.
In short, let the press tell you we’re on the verge of a crisis and that we’re nearing a recession.
Just because they report it, doesn’t make it true.
Stay tuned to The Cheap Investor for more on our booming U.S. economy.