Submitted by Taps Coogan on the 5th of February 2019 to The Sounding Line.
American Action Forum President Douglas Holtz-Eakin and CNBC’s Rick Santelli discuss the most recent employment data, and what it says about the US economic outlook.
“Look, this is an extraordinary accomplishment. If you look at 2018, into 2019 now, we have been able to draw people into the labor force… that were previously very detached from that and that’s a great thing for the country. It’s a great thing for those people. At the end of the Great Recession in 2010, we had 1.1 million discouraged workers. In 2017, we had 1.1 million discouraged workers. At the end of 2018, we had 400,000. It’s an amazing accomplishment, what happened in the last year?”
“…Everybody’s talking about the income disparity. I get it. But if you look at year-over-year earnings, this is the sixth month we’ve had a 3% handle (over 3% growth). In order to find a string that long, you have to got back to the back half of 2008/2009… Even though productivity isn’t what it used to be, it has to… be increasing a bit to offset that these wage numbers aren’t pushing into inflation.”
“… The notion that somehow a tight labor market will not reward labor, which you hear a lot, is just wrong. It’s not in these numbers…. We’re seeing increased total hours… increased employment. It’s a very strong labor market and it really is… a strong statement against all the negative talk you’ve heard about the possibility of the economy going into a recession. It’s just not in the data… 70% of the economy is housing (the housing sector).”
“… Just the generalized notion that unemployment is… just some kind of coincident of lagging indicator, and maybe by textbook economics it is, but it certainly does speak volumes that there could be many more innings left for the growth even though some of the metrics just aren’t going to be as good as they were a year ago…”
While unemployment definitely is a coincident or lagging indicator, with the average cycle low in unemployment since 1950 coming less than four months before the declaration of a formal recession, the strength of US households is nonetheless one of the few genuinely hopeful sings in an otherwise dreary global economic outlook.
There is more to the interview, so enjoy it above.
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