Ignoring Good News About America’s Economy

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Posted: May 10, 2018 10:51 AM
Ignoring Good News About America’s Economy

In the aftermath of the election of 2016, America’s economy has made a significant comeback following a decade of recession and poor decision making in Washington.  But you wouldn’t notice it from major news media reports.

Part of the problem established by the media’s replacement of objective coverage of the news with editorial opinion is that significant information simply does not get reported, outside of specialty publications and sources that happen to favor the political interests that gain from a particular piece of information.

Currently, many general media sources are ignoring or downplaying the national economic revival.

The Congressional Budget office (CBO)  has reported that real GDP growth is relatively strong this year and next, as recent changes in fiscal policy add to existing momentum. Productivity growth, after the ravages of the recession and the Obama economy,  are returning to nearly average over the past 25 years.  The Trump Administration’s changes in fiscal policy have boosted incentives to work, save, and invest. CBO also estimates  that receipts for the first seven months of fiscal year 2018 totaled $2,012 billion, a figure which is $83 billion more than the amount during the same period last year. That is somewhat surprising. Receipts collected in April, for example, were $30 billion to $40 billion larger than CBO expected.

The good news is, according to CBO, mostly related to economic activity in 2017 and may reflect stronger-than-expected income growth in that year.

Economic and business publications, unlike the general media, have noticed. Forbes notes,

“A strong job market will likely lead to higher consumer spending in the summer months as employment and incomes keep growing. Inflation isn’t expected to be as volatile. HSBC estimates 1.9%, or thereabouts, for the foreseeable future.”

The Hill reports that,

“Fourteen states have set new records for low unemployment rates in the last year, nearly a decade after the recession put millions of Americans out of work. […] Such a tight job market means businesses are competing for workers, rather than workers competing for scarce jobs.”

These aren’t abstract figures that are merely statistics good for Wall Street while not helpful to Main Street, a problem that was prevalent during the Obama Administration.  Middle class employment is finally rising. The latest Bureau of Labor Statistics  monthly report disclosed that Total nonfarm payroll employment increased by 164,000 in April, and the unemployment rate edged down to 3.9 percent. More important than the overall statistic was the type of jobs that were increasing. Job gains occurred in professional and business services, manufacturing, and mining, solid middle class occupations which had been declining over the past decade as a result of poor policy decisions. BLS found that,

“In April, employment in professional and business services increased by 54,000. Over the past 12 months, the industry has added 518,000 jobs. Employment in manufacturing increased by 24,000 in April. […] Manufacturing employment has risen by 245,000 over the year. […] In April, employment in mining increased by 8,000. […] Since a recent low in October 2016,employment in mining has risen by 86,000."

BLS also found that the median weekly earnings of wage and salary workers in the first quarter of 2018 Median weekly earnings of the nation’s 113.4 million full-time wage and salary workers was 1.8 percent higher than a year earlier.

In a statistic that may prove somewhat disruptive for Democrats in the upcoming midterm elections, who heavily depend on black and Latino support, the Trump Administration’s economic policies have been particularly helpful to both those communities.  The unemployment rate for black workers dropped to 6.6 percent, beating the previous record low of 6.8 percent set in December. Similarly, Hispanics had an historic low  unemployment rate of 4.8%, matched once before in 2006.

Frank Vernuccio serves as editor-in-chief of the New York Analysis of Policy & Government.