An overwhelming August employment report amplifies fears of a slowdown in economic activity and increases President Trump Donald John TrumpPompeo pushes for a possible Senate from Kansas media Hill's 12:30 report: Trump takes over The Hurricane Dorian Projection The mental decline of Trump is perfectly clear to those with sighted and audible eyes. The US created about 1
The resilient labor market was one of Trump's best selling arguments when he tried to win reelection because of the strength of the US economy. But August's disappointing job report threatens to undercut Trump's message before it becomes a critical phase for the economy.
The report comes as the Trump administration and China try to resuscitate trade talks after more than a year of tariffs The two largest economies in the world.
The deputy-level talks are expected to start later this month in the hope that they will open the door to a senior officials meeting in October.
But with only 14 months to go In the 2020 elections, Trump faces a narrower window to conclude a ceasefire with China, which could push the US out of recession.
While trade experts have ruled out the possibility of a comprehensive deal, the US and China could seek a smaller deal to reduce tensions and tariffs. Otherwise, not only the US economy, but also Trump's shot could falter for another term in the White House.
"Today's employment data and earlier revisions by 2018 indicate that we have reached a watershed moment," wrote Diane Swonk, chief economist at Grant Thornton, in a Friday research report.
This is probably a reaction to the trade tensions and the weakness we observe abroad. "
Trump has remained defiant despite increasing pressure to end his trade war with China by downplaying the risks to the economy and talking about losing leverage." The President repeatedly warned Beijing not to wait to reach an agreement with his potential successor and insisted that the US economy be strong enough to survive a fight with China. "" China eats the tariffs. & # 39; Billions are pouring into the USA. Targeted patriot farmers get massive dollars from incoming customs duties! Good job numbers, no inflation (Fed). China has the worst year in decades. Talks are going well, good for everyone! "Trump tweeted on Friday.
President also looked at the media's media coverage, Trump added just hours after the job posting was published.
So far, consumers have been largely from the direct Trump's effects of the trade war stalled even as business expansion, manufacturing and other trade-related sectors faltered.
While the US is facing higher recessionary opportunities, the country still has a strong labor market, steady consumer spending and a solid one Approximately 571,000 people joined the workforce in August, increasing labor force participation and keeping unemployment constant at 3.7 percent.
"The stories in the paper have produced a psychology that is far worse than reality," he said the director of the National Economy aftsrats Larry Kudlow Lawrence (Larry) Alan KudlowMORE told reporters at the White House on Friday. "The underlying strength of the economy is much better than people might believe."
Nevertheless, months of fading industrial production, increased tensions and poor economic data from abroad appear to be closer to the labor market.
Job Growth has slowed significantly from a scorching year in 2018, with average monthly employment growth falling from 234,000 last year to 158,000 in 2019. According to economists, employment growth has fallen in the direction of the 100,000 monthly growth required to avert a recession.
The effects of the trade war … are having an impact on the real economy, "wrote Joseph Brusuelas, chief economist at RSM, in a Friday research report," Friday's government report shows how unflattering the future is. " The next test for the US labor market will take place in October, when Trump will raise tariffs to US $ 250 billion for Chinese imports from 25 percent to 30 percent, with the President expected to raise 15 percent in December for another $ 320 billion tranche of Chinese goods, after taxing about half of those goods on September 1.
The Federal Reserve is expected to cushion this shock An interest rate cut if the Bank's Policy Committee The independent central bank is likely to see a modest reduction of 0.25 percentage points as a safe haven against a possible downturn that is well below Trump's target of 1 percentage point.
Trump has called on the Fed to halve interest rates from 2% to 2.25%, calling for an incentive last seen during the 2008 recession. The President reiterated his attacks on the Fed and his handpicked chairman Jerome Powell in a tweet published just before the job report was published. A quantitative tightening has not helped either, "Trump tweeted." Where did I find this guy, Jerome? Well, you can not win all!
Powell responded during a Friday speech in Switzerland that "the most likely outlook for the US is still moderate growth, a strong labor market, and inflation continues to move forward." Abolition calls for a steep cut.
However, the Chair also acknowledged that the Fed could only do so much to protect the economy from trade policy. The ball stays with Trump.
] "Uncertainty about trade policy is causing some companies to hold back on their investments," Powell said.