U.S. employment growth slows, trade deficit rises to highest level since January

[DonViejo]

FRIDAY, JUN 2, 2017 12:05 PM EDT

U.S. employment growth slows, trade deficit rises to highest level since January

Yes, unemployment is lower than before, but there are reasons to worry about the economy

SOPHIA TESFAYE

Economists had expected a gain of about 185,000 new jobs in May, but a report from the Bureau of Labor Statistics published on Friday showed that the U.S. economy only added 138,000 jobs. Following sizable revisions downward in the March and April jobs reports, it may be time to suggest that President Donald Trump’s campaign promise to bring jobs back to the U.S. has disappointed.

As recently as Thursday, Trump said that a million jobs were created since he took office. But U.S. employment growth is actually slowing. While the unemployment rate fell slightly to 4.3 percent, that drop is more accurately a reflection of a weakening job market. The labor force participation rate fell 0.2 percentage points — to 62.7 percent — and the employment-to-population ratio also fell 0.2 percentage points, suggesting that would-be workers are leaving the workforce after failing to find suitable employment.

Worse yet, while the initial April report said the economy had added 211,000 nonfarm payroll jobs, that figure was revised to 174,000 Friday — a drop of 37,000. And the already disappointing March jobs report saw even further downward revisions, from a gain of 79,000 to a gain of only 50,000 jobs. After Friday’s revisions, the three-month average swooped down to 121,000 — far lower than previously reported.

On top of the disappointing jobs figures, a separate report released on Friday pointed to the widest trade gap since Trump took office. The Commerce Department said the U.S. trade deficit rose in April to the highest level since January, which could not only bring down second economic quarter growth but is also anathema to Trump’s stance on trade. Already this year, the trade deficit is up 13.4 percent from a year before to $186.6 billion and the deficit in goods with China rose by 12.4 percent to $27.6 billion in April.

According to the government’s figures on gross domestic product during Trump’s first few months in office, trade actually contributed very little to first-quarter growth after subtracting the nearly 2 percentage points growth from the final three months of Barack Obama’s presidency. The trade figures also include annual revisions for 2014 through 2016, which was revised up 0.8 percent. The U.S. dollar fell against its major rivals following Friday’s disappointment report.

more
http://www.salon.com/2017/06/02/u-s-employment-growth-slows-trade-deficit-rises-to-highest-level-since-january/

[msongs]

1. trade deficit from buy all that trump junk made in china lol nt

[Gothmog]

2. Are we tire of winning yet?

[Quixote1818]

3. Paris is going to make things even worse. No one will want to do business with America now

He is isolating us and American's are going to start feeling it big time real soon. Not to mention the tourist industry is probably going to have a terrible summer.

[Igel]

4. I'm going to call the labor force participation rate "flat".

It's bounced from 62.6 to 63.0 over the last year and a half. You can try to read meaning into the curves, but I'm not sure there's any meaning there. Yeah, it's down 0.2 in the last month--bad Trump. But it reached a two-year high during Trump's first month in office, and I'm not going to say, "good Trump." Looks like jitter, maybe a mild bit of feedback.

https://data.bls.gov/timeseries/LNS11300000 has the official numbers.

There's a slight increase in trade deficits over the last 2 1/2 years; before that, well, just see https://tradingeconomics.com/united-states/balance-of-trade and pick "10 years". On that graph, the y-axis is all negative so "up" is a good direction for the trade deficit. One's left not knowing what to make of it, though: Is it because oil exports are down, because imports of cars are up? It's a composite and something more's needed: Is it increased demand on the part of Americans for overseas-made goods or a decline in demand from other countries? (Yes, there are "I think it's this reason because I need to" answers, but the truth in this case really is out there.)

At 4.4% unemployment, it's hard to go much lower. https://data.bls.gov/pdq/SurveyOutputServlet (pick 1948 to present for display). It got down to 2.5 in the '50s, was low in the late '60s, but those two periods had two things in common: Lots of reasonably unskilled labor and it was during war when lots of men were out of the country or otherwise indisposed for the labor force. Got down to 3.9 at the height of the Clinton boom, just before the tech bubble burst and the NASDAQ then NYSE crashed. Still, not a huge amount to play with.