Wall Street Pundits Worry About Impending Recession As Economy Slows

Donald Trump

Wall Street experts say increased stock market volatility may be signs of an impending recession as Donald Trump's trade war with China continues to heat up.

From Politico:

Over just the last few days, economists at Goldman Sachs, Morgan Stanley and Bank of America all warned that Trump’s bitter trade war with China is taking a bigger bite out of economic growth than expected.

The warnings came as stocks suffered another big dip on Monday with the Dow closing off nearly 400 points, or 1.5 percent, putting the blue-chip index at 25,897, over 700 points lower than it was in January of 2018 before Trump’s trade fights began in earnest. Stocks bounced back Tuesday after the Trump administration’s announcement about postponing some tariffs that had been set to take effect next month, continuing a long track record of market volatility tied to trade policy.

The collective wisdom now spreading across Wall Street is that no trade deal will be struck with China before the 2020 election; business investment will continue to sag; and a series of interest-rate cuts from the Federal Reserve won’t be enough to juice more growth out of an economy now in its tenth year of expansion — the longest stretch in American history.

With economic growth slowing to 2.1 percent in the second quarter, Trump is predictably shifting from crowing about the stock market to blaming the Federal Reserve for not utilizing more interest rate cuts.

Bank of America’s head of U.S. economics Michelle Meyer said in a note to clients that she believes there is a 1-in-3 chance of a recession in the next 12 months.

US Economy Adds 263,000 Jobs In April

The Labor Department reports that 263,000 jobs were added to the U.S. economy in April, making for a record 103 straight months of positive job growth.

With those jobs factored in, the unemployment rate dropped to 3.6 percent, the lowest since 1969.

The official unemployment rate has been at or below 4 percent for more than a year.

Additionally, average hourly earnings rose 3.2 percent in the past year.

Report: #TrumpShutdown Cost US Economy $11 Billion

Donald Trump

Donald Trump's knee-jerk reaction to criticism by Rush Limbaugh and Ann Coulter, which triggered the longest government shutdown in US history, cost the US economy $11 billion, reports the nonpartisan Congressional Budget Office.

The analysis takes into account lost output from federal workers, delayed government spending and reduced demand.

Via CNBC:

The report, which was released Monday, estimated a hit of $3 billion, or 0.1 percent, to economic activity during the fourth quarter of 2018. The impact was projected to be greater during the first quarter of 2019: $8 billion, or 0.2 percent of GDP.

Although most of the damage to the economy will be reversed as federal workers return to their jobs, the CBO estimated $3 billion in economic activity is permanently lost after a quarter of the government was closed for nearly 35 days.

"Among those who experienced the largest and most direct negative effects are federal workers who faced delayed compensation and private-sector entities that lost business," the report said. "Some of those private-sector entities will never recoup that lost income."

General Motors Announces 5 Plant Closures, 14,000+ Layoffs

The Chicago Tribune is reporting General Motors, the largest automaker in the United States, will be laying off 14,500 factory and white-collar workers.

In addition, five plants will be closed during a 2019 company restructuring.

The reduction includes 8,100 white-collar workers, some of whom will take buyouts and others who will be laid off. Most of the affected factories build cars that won't be sold in the U.S. after next year. They could close or they could get different vehicles to build. They will be part of contract talks with the United Auto Workers union next year.

The four factories in the U.S. and one in Canada could be shuttered by the end of 2019 if the automaker and its unions don't come up with an agreement to allocate more work to those facilities, GM said in a statement Monday.

Plants without products include assembly plants in Detroit; Lordstown, Ohio; and Oshawa, Ontario. Also affected are transmission factories in Warren, Mich., as well as Baltimore.

More than 6,000 factory workers could lose jobs in the U.S. and Canada, although some could transfer to truck and SUV plants.

The cuts represent 15% of GM's work force.

The timing could prove problematic for Donald "I Create Jobs" Trump as he enters the 2020 campaign cycle.

According to the Chicago Tribune, the closures will save $6 billion in cash by the end of next year.

This is all in addition to the $6.5 billion in cuts already announced for the end of this year.

#SoMuchWinning

General Motors plans to halt production at 3 assembly plants in Canada, Ohio, and Michigan by not allocating new products, Reuters reports.

Cost pressures have increased. GM also has said Trump-imposed tariffs on imported steel have cost it $1 billion.https://t.co/h2Bzl0DlAM

— Kyle Griffin (@kylegriffin1) November 26, 2018

BREAKING: trump's tariffs on steel causing General Motors to lose $1B, now they'll layoff 14,000 jobs in North America.

Can someone PLEASE explain how this equals #winning? https://t.co/FgBpDrUkF1

— BrooklynDad_Defiant! (@mmpadellan) November 26, 2018

Trump, July 2017: people in Youngstown, Ohio worried about the city's General Motors plant will be fine!

Today: General Motors is closing its Youngstown, Ohio plant partly due to Trump's trade war.

— Pé Resists (@4everNeverTrump) November 26, 2018

Trump Takes Credit Yet Again For The Obama Economy

Donald Trump took to Twitter on the last day of 2017 to boast yet again about the economy:

If the Dems (Crooked Hillary) got elected, your stocks would be down 50% from values on Election Day. Now they have a great future - and just beginning!

Why would smart voters want to put Democrats in Congress in 2018 Election when their policies will totally kill the great wealth created during the months since the Election. People are much better off now not to mention ISIS, VA, Judges, Strong Border, 2nd A, Tax Cuts & more?

If the Dems (Crooked Hillary) got elected, your stocks would be down 50% from values on Election Day. Now they have a great future - and just beginning! https://t.co/9TzSC8F8vY

— Donald J. Trump (@realDonaldTrump) December 31, 2017

Why would smart voters want to put Democrats in Congress in 2018 Election when their policies will totally kill the great wealth created during the months since the Election. People are much better off now not to mention ISIS, VA, Judges, Strong Border, 2nd A, Tax Cuts & more?

— Donald J. Trump (@realDonaldTrump) December 31, 2017

A few facts are missing from the Trumpster's perspective here.

Most importantly the fact that he inherited an already healthy economy with a 4.7% unemployment rate and a stock market that had more than doubled.

And then the smart kids chimed in:

2017 saw the fewest number of jobs created in 6 years.
3.5 million more are uninsured.
Premiums are up.
And Trump has taken only one step: a $1.5 trillion tax cut, mostly for the rich and corporations.
I’ll take that fight. https://t.co/i4PKMX8KcE

— Jon Favreau (@jonfavs) December 31, 2017

stock values more than doubled under Obama https://t.co/JYIhMVQ0rq

— John Harwood (@JohnJHarwood) December 31, 2017

Not that it really matters, but the stock market went up relatively more in Obama's first year than in yours.

It was also during the tenure of a GOP president when we slid into the Great Recession.

But, you know... Facts.

— Pé Resists (@4everNeverTrump) December 31, 2017

The stock market grew 29% in Obama's first 11 months.

It grew only 24% in Trump's first 11 months.

But please, go on. Your delusions entertain me.

— Gary M. Sarli (@GMSarli) December 31, 2017

I'll attach the stock market again for about the 200'redthth time. What has the trend been for 8 years? A Chimpanzee could sit where you are and look good. If the Dems were elected, we wouldn't be doing endless investigations and giving away cash to rich people and corporations. pic.twitter.com/v2lfUiJrAu

— Desert Time Traveler (@Rtn4452Randy) December 31, 2017

1) B/c you’re a liar, none of that is true; 2) you’re a racist, emboldened white supremacists; 3) you’re a sexual predator; 4) you’ve attacks rights of women, LGBT, minorities; 5) climate change; 6) many more reasons, GOP does nothing. That’s why smartvoters won’t vote GOP. https://t.co/DqagbSydMt

— Mike Signorile (@MSignorile) December 31, 2017

The Obama stock market still roaring along. You have nothing to do with it.

— Ronald Traylor (@RonaldTraylor11) December 31, 2017

Middle-Class Incomes In 2016 Reached Highest Level Ever Recorded

Here's President Obama's final report card on the economy for the last year of his presidency.

And the news is good.

According to the Census Bureau, middle-class American incomes reached the highest level ever recorded in 2016.

From the Washington Post:

Median household income rose to $59,039 in 2016, a 3.2 percent increase from the previous year and the second consecutive year of healthy gains, the Census Bureau reported Tuesday.

The nation’s poverty rate fell to 12.7 percent, returning nearly to what it was in 2007 before a financial crisis and deep recession walloped workers in ways that were still felt years later.

“There’s a danger that this is as good as it gets,” said Peter Atwater, president of Financial Insyghts. “We are already at a 16-year low in unemployment. The likelihood of significant job growth from here is limited.”

Trump promised that a combination of tax cuts, infrastructure investment packages, renegotiated trade deals and the repeal of Obama administration regulations would deliver a burst of job creation and attendant economic growth.

So far, no such boom can be found.

In Trump’s first seven months, the U.S. economy has added about 25,000 fewer jobs per month than it did during the last seven months of Barack Obama’s presidency.

It'll be interesting to see how the next three years go under Trump having been handed a healthy U.S. economy.

Trump Says He "Created" Over 1 Million Jobs But It's Not True

Donald Trump is fond of saying that he created over a million jobs in the first six months of his presidency.

Such language - “I’ve created over a million jobs since I’m president" - is a departure from most presidents who usually use phrases like "the economy has added X number of jobs" or "American businesses have added X number of jobs." But when it comes to the Trumpster, it's all about him.

Economic experts say it's actually difficult to quantify how much a president can influence the job market.

Gary Burtless of the Brookings Institution says it would be wrong to take Trump's claim literally because American employers actually create jobs, not the president.

And, the trend of job creation in the U.S. over the past 7 years has not changed trajectory. In fact, the number of jobs added to the economy over the past six months lags behind the same time periods of the past few years.

From the Washington Post:

In the first six months of Trump’s presidency, there have been slightly more than 1 million jobs created, according to the Bureau of Labor Statistics.

But Burtless noted there’s been very little change in the trend in employment in the first six months of 2017, compared with the same period in the previous four years.

In fact, the gain in payroll employment in the January-through-July period was a bit slower in 2017 compared with the previous four years, whether measured as an absolute rise in the number of nonfarm payroll jobs or as a percentage of employment in January of the indicated year.

Source: Bureau of Labor Statistics

As you can see in the graphic above, the number of jobs added in the first half of this year is actually less than the same period in Obama's last four years in office. Ironically, Trump criticized Obama for those very same numbers at the time.

The Washington Post goes on to say that Trump might have some foundation to base his boasts on if he had passed any major economic legislation, but the fact is Trump has little achievement to point to on the legislative front.

Paul Krugman On Republican Vs. Democratic Approaches To States' Economies

All-around economic smart guy Paul Krugman tweets today:

"Tax-raising liberal Jerry Brown and tax-slashing true believer Sam Brownback took office at the same time. How's it going?"

Any questions?

Tax-raising liberal Jerry Brown and tax-slashing true believer Sam Brownback took office at the same time. How's it going? pic.twitter.com/hX8qflHSRO

— Paul Krugman (@paulkrugman) February 28, 2017

So why, exactly, do conservatives believe that they can deliver dramatically higher economic growth?

— Paul Krugman (@paulkrugman) February 28, 2017

Nevada Leads The U.S. In Job Creation

Hey, hey, hey - my homestate of Nevada has moved from zero to hero in Gallup's Job Creation Index.

Nevada led the way as the U.S. showed strong job growth in 2016, scoring highest among all states in Gallup's 2016 Job Creation Index.

The rise to the top spot completed a six-year climb for Nevada, which ranked last among the states in both 2009 and 2010.

Moving in the other direction, Wyoming scored last among the states for 2016 -- eight years after topping Gallup's first Job Creation Index in 2008.

Each night in its Gallup Daily tracking survey, Gallup asks employed Americans to report on hiring activity at their place of work. Gallup's Job Creation Index is based on the percentage of workers saying their place of employment is increasing the size of its workforce, minus the percentage saying their place of employment is reducing the size of its workforce.

For the nation overall, the Job Creation Index score has grown each year since 2009, from -1 to +32 in 2016 (43% hiring, 11% letting go).

U.S. Economy Adds 156K Jobs In December, Extends Longest Job Growth In American History To 75 Months

The economy added 156,000 jobs in December, extending the longest streak of total job growth in U.S. history to 75 straight months, with U.S. businesses adding 15.8 million jobs over the recovery.

Average hourly earnings for all private workers increased 2.9 percent over the past year, the fastest twelve-month pace since the end of the recession and above the pace of inflation in 2016.

The unemployment rate has been cut by more than half since its peak in 2009, falling much faster and further than expected. After peaking at 10.0 percent in October 2009, the unemployment rate fell rapidly over the course of the recovery, and by mid-2015 had recovered fully to its pre-recession average. Since then, it has fallen even further, standing at 4.7 percent at the end of 2016.

And while we're at it, just a few more facts to add as Obama closes out his run as president:

(source)

Tweet Of The Day

U.S. Federal Reserve Raises Interest Rates Due To Strong Economic

Reuters reports that, thanks to solid economic growth, interest rates will rise by a quarter point for now with the possibility of more increases in the coming months.

The U.S. Federal Reserve raised interest rates by a quarter point on Wednesday and signaled a faster pace of increases in 2017 as the Trump administration takes over with promises to boost growth through tax cuts, spending and deregulation.

The rate increase, regarded as a virtual certainty by financial markets in the wake of a string of generally strong economic reports, raised the target federal funds rate 25 basis points to between 0.50 percent and 0.75 percent.

“In view of realized and expected labor market conditions and inflation, the committee decided to raise the target range,” the central bank’s policy-setting committee said in its unanimous statement after a two-day meeting.

“Job gains have been solid in recent months and the unemployment rate has declined,” the Fed said, noting that market-based measures of inflation compensation had moved up “considerably.”

The rate increase was the first since last December and only the second since the 2007-2009 financial crisis, when the Fed cut rates to near zero and deployed other tools such as massive bond purchases to stabilize the economy.

GDP Grows By 2.9% - Biggest Gain Since 2014

Donald Trump can rant and rave all he wants to about how "disastrous" and "terrible" the U.S. economy is and how we are headed in the wrong direction, but the facts suggest otherwise.

The Wall Street Journal's headline: "U.S. Economy Roars Back, Grew 2.9% in Third Quarter - Growth rate was the fastest recorded in two years"

Reuters: "Wall St. rises amid robust GDP data"

More from USA Today:

The economy bounced back from a prolonged slump in the third quarter as exports surged, businesses replenished depleted stocks and consumer spending picked up moderately.

The nation’s gross domestic product, the value of all goods and services produced in the economy, increased at a seasonally adjusted annual rate of 2.9%, the Commerce Department said Friday, the biggest gain in two years. Economists surveyed by Bloomberg had forecast 2.6% growth.

Additionally, exports surged by 10% helping to close the trade gap.

Americans' Median Income Increased 5.2% In 2015

(graphic via CNN)

For the first time since 2007, the year before the Great Recession, the median household income increased to $56,516, up 5.2% from the previous year, according to data released by the Census Bureau today.

The 5.2% represents one of the largest annual increases since the Census Bureau began tracking such data.

Expect the good news to become campaign trail talking points for both Democrat Hillary Clinton and Republican Donald Trump.

Trump has regularly made the point that household incomes are $4,000 lower than in 2000. And that would be true if we were talking 2014 data; Trump often uses the 2014  numbers as if they are current.

Look for Clinton to point to the news as evidence that the economy is improving.

Additionally, the poverty rate dropped 1.3% to 13.5% in 2015.

So what constitutes for the big jump in median income? 3.3 million more Americans were working full-time. Data shows 1.4 million more men and 1 million more women had jobs last year.

(source)

Donald Trump's "Economic Plan" Does Nothing For Middle Class America

Donald Trump's economic plan is a bad deal for working families—and a big tax cut for Donald Trump.https://t.co/D0oOe6bwza

— Hillary Clinton (@HillaryClinton) August 9, 2016

Donald Trump made a big deal about unveiling his "economic plan" for America, hoping for a kind of campaign reset as he plummets in the polls.

The problem is, though, none of what he is proposing is visionary or innovative.

We learned "trickle down" economics don't work. Giving big tax cuts to the wealthy with the hopes that the rich will "reinvest" those gains into new employees or higher wages is a fallacy. Doesn't happen.

And eliminating the estate tax does nothing to encourage the economy to grow. It's just a big giveaway to folks like Trump's kids.

Once again Trump is attempting to do a little flim-flam action saying "look what I'll do," when in reality none of this will actually "do" anything.

U.S. Job Growth Surges In U.S. As Unemployment Falls To 7.5 Year Low

#Unemployment drops to 5%, economic #growth exceeds expectations for October https://t.co/9uH2khWHyZ pic.twitter.com/JADTMIF67u

— Washington Examiner (@dcexaminer) November 6, 2015

The unemployment rate in America fell to 5% in October as non-farm payrolls added 271,000 jobs last month. This represents the lowest unemployment level in seven and a half years.

Additionally, with strong auto sales and average hourly earnings increasing by 9 cents, many economists see the economy as beginning to hit a solid stride.

As conservatives continue to attempt a woeful picture of the American economy, it's easy to see between the dropping unemployment rate and a stock market that has more than doubled during President Obama's administration that the U.S. has improved it's economic outlook.

(source)

Video Of The Day: Bill Maher On Economic Facts

Bill Maher slams the Obama-hating 2016 Republican candidates a...
Watch: Bill Maher slams the Obama-hating 2016 Republican candidates at this week's debate.Video by Occupy Democrats, LIKE our page for more!
Posted by Occupy Democrats on Saturday, September 19, 2015

Bill Maher pulls out facts in response to Republicans who say they want to "take our county back."

Back to what, exactly?

I should note, and regular readers know this to be true, I've been saying exactly this for years now.

How Is The U.S. Deficit Doing?

Economy Adds 215K Jobs In July - 65 Straight Months Of Positive Job Growth

Share the news: Our economy added 215,000 jobs last month and our unemployment rate is 5.3% #JobsReport pic.twitter.com/YTUXHpDVAN

— US Labor Department (@USDOL) August 7, 2015

Jeb Bush Should Ask His Brother About Working "Longer Hours"

Recently, GOP presidential hopeful Jeb Bush suggested the country could improve economically if Americans would work longer hours.

An ironic statement considering his brother took more vacation days than any other president in recent history.

As a matter of fact, it looks like Republicans like their vacay days a lot more than Democrats.