“Trumponomics” and the jolt of a boom 5

There is an old maxim among conservatives: everything government does, it does badly.

The very opposite can be said of the present head of the US federal government: everything President Trump does, he does well.

(We say “does”, not “says”. He lacks the gift of eloquence – and it doesn’t matter. He’s better without it. Instead of being a great orator, he’s a great communicator.)

For one thing – the most important thing – President Trump has made America prosperous again.

From Investor’s Business Daily:

How extraordinary is this job boom? The government says that the number of jobs available has never been higher. There were 7.14 million jobs in August ready to be filled, an increase from July’s 7.1 million, which was also a record. This is the best time in decades to be seeking a job, even if you’re unemployed.

That’s the easily drawn conclusion from the Bureau of Labor Statistics’ Job Openings and Labor Turnover (JOLTs) report, which is important but gets much less attention than the monthly payroll jobs and unemployment numbers.

The JOLTs data say many things about our economy right now.

For one thing, economic growth is blazing hot. August was the fifth month in a row in which the number of jobs exceeded the official number of unemployed. The 7.14 million of open jobs in August exceeded the number of unemployed, now at 5.96 million, by about 1.2 million. That’s never happened in the history of the series, which dates back to the end of 2000. Moreover, the number of new hires, at 5.78 million, is also a record.

So let that sink in for a moment: We now have more jobs than unemployed people to fill them. …

Wages are starting to rise, along with productivity. …

If current torrid job growth continues, businesses will have to pay productive workers more, or suffer slower growth and perhaps market share erosion as a result. So, absent major changes in economic conditions, higher wages are coming.

Which leads to our final point, made many times before, but which bears repeating: Rising wages do not cause inflation. This is a categorical mistake that has somehow become a part of many of the world’s economic models. …

All of this is happening because of the tax cuts and deregulation put in place by President Donald Trump. … Once again this magic elixir worked to bestir a seemingly stagnated economy. How much longer will it be until supply-side ideas that clearly work get the respect they deserve? And how much longer will it be until Keynesian ideas that clearly don’t work get relegated to the junk pile where they belong?

So let wages rise. And don’t expect us to join the inevitable sudden “economic” consensus that rising wages will require the Fed to hit the economy’s brakes with a series of punitive rate hikes. That would be yet another in a long line of mistakes by the nation’s central bank.

And the president is warning against it.

From Breitbart:

President Trump said … the Federal Reserve is raising interest rates too quickly, a move he blamed on Federal Reserve Chairman Jerome Powell.

My biggest threat is the Fed. Because the Fed is raising rates too fast. And it’s independent, so I don’t speak to them. But I’m not happy with what he’s [Powell’s] doing. Because it’s going too fast.

[And he] cited “very low” inflation numbers.

Thanks, Mr. President!

Down with the Fed!

Posted under Economics, United States by Jillian Becker on Thursday, October 18, 2018

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