We Just Got Some Good Economic News

When some good economic news comes along, we should be thankful for it, because such moments are becoming increasingly rare.  On Friday, the Labor Department announced that the U.S. economy added 128,000 jobs last month, and that definitely exceeded expectations.  Of course the truth is that the U.S. economy didn’t actually add 128,000 jobs last month.  That number is just a heavily manipulated estimate that is adjusted to smooth out “seasonal fluctuations”, and it will be revised multiple times in the future as more data becomes available.  In other words, the government is giving us an educated guess about what they think might have happened, and it is based on certain assumptions that may or may not be reasonable.  But considering all of the other horrible economic news that we have been getting lately, any number above zero is a reason to celebrate.  The employment situation in this country still appears to be relatively stable, and we should hope that continues to be the case for as long as possible.

Of course nobody should be using words like “boom” or “booming” to describe what is happening.  An increase of 128,000 jobs in one month is not nearly enough to keep up with population growth.

So if the U.S. economy actually did add 128,000 jobs last month, the truth is that we would actually be losing ground.

But at least the jobs number was significantly better that most analysts were projecting

Nonfarm payrolls rose by 128,000 in October as the U.S. economy overcame the weight of the GM autoworkers’ strike and created jobs at a pace well above expectations.

Even with a decline of 42,000 in the motor vehicles and parts industry, the pace of new jobs well exceeded the estimate of 75,000 from economists surveyed by Dow Jones. The loss of jobs came due to the General Motors strike that has since been settled. That 42,000 job loss itself was less than the 50,000 or more that many economists had been anticipating.

Hopefully we can have at least a couple more months like this one before the job losses really start becoming severe.

But this is definitely not an indication that the U.S. economy is heading in the right direction.  Because job gains did not keep up with population growth, it makes sense that the unemployment rate actually went up last month

The unemployment rate, which is calculated from a different survey, rose from a 50-year low of 3.5% to 3.6%, the Labor Department said Friday. That’s because a strong increase in employment was offset by an even bigger rise in the labor force, which includes Americans working and looking for jobs.

Also, it is very important that you do not let that “3.6 percent” figure fool you.

As John Williams has documented, if honest numbers were being used the unemployment rate in the United States would currently be 21 percent.  That is down a couple of percent from the peak of the last employment crisis, but it is still not good at all.

And even though the jobs number that we just got was good news, more bad economic news continues to pour in at an alarming rate.  According to the latest projection from the Federal Reserve Bank of Atlanta, the U.S. economy is on track to grow at a rate of just 1.1 percent in the fourth quarter…

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2019 is 1.1 percent on November 1, down from 1.5 percent on October 31. After this morning’s release of the employment report by the U.S. Bureau of Labor Statistics, the Manufacturing ISM Report On Business from the Institute for Supply Management, and the construction spending report from the U.S. Census Bureau, the nowcasts of fourth-quarter real personal consumption expenditures growth and fourth-quarter real gross private domestic investment growth decreased from 2.3 percent and -0.7 percent, respectively, to 2.2 percent and -2.5 percent, respectively.

That is horrible, but at least it is still a number that is above zero.

Unfortunately, GDP growth for our neighbor to the south has already fallen below that line.  The following comes from Wolf Richter

In the third quarter of 2019, Mexico notched up its first year-over-year decline in GDP since the final quarter of 2009, when it was in the midst of a sharp recession brought on by the Financial Crisis. According to a preliminary estimate published by Mexico’s statistical institute INEGI, in the third quarter, the economy shrank 0.4% compared with the same quarter a year earlier.

So what should we make of all this?

Clearly, the U.S. economy is slowing down.  The temporary reprieve that we have been enjoying for the past few years appears to be ending, but the jobs number that we got today indicates that it is not done quite yet.

Ultimately, that is good news.

One of the most precious resources that any of us has is time.  If the U.S. economy can remain at least somewhat stable for a little while longer, that buys us some time, and all of us should be using that time wisely.

Because the truth is that the clock is ticking, and economic conditions in the United States are about to make a dramatic turn for the worse.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep.  My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters.  (#CommissionsEarned)  By purchasing those books you help to support my work.  I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I can only allow this to happen if this “About the Author” section is included with each article.  In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished.  This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished.  I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

The Election Of Donald Trump Is Already Having An Enormous Impact On The Economy

donald-trump-and-barack-obama-in-the-oval-office-public-domainThe election of Donald Trump has sent shockwaves through the U.S. economy and the U.S. financial system.  Since November 8th, the Dow has hit a brand new all-time record high, the U.S. dollar has strengthened greatly, and bank stocks are way up.  But not all of the economic news is good news.  Unlike stocks, bonds have reacted very negatively to Trump’s election victory.  The past week has been an absolute bloodbath for bond traders, and as you will see below this is going to have dramatic implications for all U.S. consumers moving forward.

Over just a two day period, more than a trillion dollars was wiped out as bond yields spiked all over the globe.  As CNN has noted, this type of “violent reaction” in the bond market has only happened three other times within the past ten years…

The rate on 10-year Treasury notes has surged to 2.3%, from 1.77% before the election. Last week’s spike in Treasury rates was so big, that it had only happened three times before in the last decade.

BlackRock’s Russ Koesterich called it a “violent reaction.”

The move stands to have broad repercussions for all Americans. Not only will the U.S. government have to pay more to borrow money, but mortgage rates and car loan costs should also rise. That’s because Treasuries are used as the benchmark for many other forms of credit.

As interest rates rise, virtually everyone in our society is going to feel the pain.

Those that need an auto loan in order to purchase a vehicle are going to find that loan payments are significantly higher than they were before.

Credit card rates will also go up, and those just getting out of school will discover that their student loan payments are even more suffocating.

But the biggest impact will be felt in the housing market.  The average rate on a 30-year fixed mortgage just hit the psychologically-important 4 percent barrier, and that could mean big trouble for the housing market in 2017

The average contract rate on the popular 30-year fixed mortgage hit 4 percent, according to Mortgage News Daily, a level most didn’t expect to see until the middle of next year. Rates have now moved nearly a half a percentage point higher since Donald Trump was elected president.

“The situation on the ground is panicked. Damage control,” said Matthew Graham, chief operating officer of Mortgage News Daily. “People were trying to lock loans quickly last week and are now facing a tough choice to lock today or hope for a bounce. Many hoped for a bounce last week heading into the long weekend and we obviously didn’t get it.”

Rising interest rates was one of the key factors that precipitated the financial crisis of 2008, and many fear that it could happen again.

And without a doubt, this rise in rates is going to affect the affordability of homes that are already on the market

“If you’re going to buy a house and your mortgage payment went up by $200 or $300, you may buy a smaller house. There’s impact on interest rate sensitive sectors, like autos and housing, and also corporate bonds themselves, where financial engineering has helped juice up the equity market,” said George Goncalves, head of rate strategy at Nomura.

In addition, rising rates will make it more difficult for those with adjustable rate mortgages to keep their homes.  Foreclosure activity was already up 27 percent during the month of October, and many are projecting that we could see another giant spike in foreclosures during the months ahead that is similar to what we saw during the last financial crisis.

Many Trump supporters don’t really care what the rest of the world thinks of our new president, but this is an area where what the rest of the world thinks really, really matters.

The truth is that the rest of the planet is not all too fond of Trump, and if that makes them a lot less eager to lend us money that is a major problem.

The only way that we can maintain our massively inflated debt-fueled standard of living is to continue to borrow gigantic mountains of money from the rest of the world at ultra-low interest rates.

If the rest of the world starts demanding higher rates of return now that Trump is president, we are going to experience economic pain on a scale that most Americans don’t believe is possible.

One of our big lenders has been China, and right now they are deeply concerned about what a Trump presidency might mean.  Trump has talked very tough about trade with China, and the Chinese are gearing up for a major trade war.  The following comes from CNBC

During his election campaign this year, Trump spoke of a 45 percent import tariff on all Chinese goods while failing to outline how it would work. Should any such policy come into effect, China will take a “tit-for-tat approach”, according to an opinion piece in the Global Times, a newspaper backed by the Communist party.

“A batch of Boeing orders will be replaced by Airbus. U.S. auto and iPhone sales in China will suffer a setback, and U.S. soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the U.S.,” the Global Times article read.

Most Trump supporters assume that since Trump has been a very successful businessman that he will be able to strengthen the U.S. economy.

But it isn’t that simple.

The only reason we are able to live the way that we live today is because we have been able to borrow trillions upon trillions of dollars at irrationally low interest rates.

The moment the rest of the world decides that they are not going to loan us money at irrationally low interest rates any longer the game is over, and it won’t really matter who is in the White House at that point.

So watch interest rates very carefully.  If they keep going up, it is inevitable that a major economic slowdown will follow no matter what economic policies the new Trump administration implements.

Guess How Much Americans Plan To Spend On Christmas And Halloween This Year…

Credit Card - Public DomainIt is that magical time of the year for retailers.  The period between mid-October and late December can often make the difference between success or failure in the retail industry, and this year will be no exception.  As you will see below, it is being projected that Americans will spend a massive amount of money this holiday season.  In fact, what Americans plan to spend on Christmas this year is greater than the yearly GDP of the entire nation of Sweden.  So isn’t this good economic news?  Shouldn’t we be happy that Americans are opening up their wallets so eagerly?  Well, it depends how you look at it.  Even though our spending is increasing, our incomes are not.  As I discussed the other day, 50 percent of American workers make less than 28,031 dollars a year and incomes have been stagnant for years.  That means that any increases in spending must be funded by more debt, and that is not good news at all.

In 2014, approximately 70 percent of all Americans will participate in Halloween.  It seems like with each passing year this dark holiday become even more popular, and before it is all said and done it is being projected that Americans will spend a whopping 7.4 billion dollars this time around…

Kicking off the end of year spending season is Halloween. Just how much do Americans spend on trick-or-treating and other Halloween festivities? The National Retail Federation (NRF) forecasts total Halloween spending—including candy, costumes, and decorations—to come in at $7.4 billion this year.

That 7.4 billion dollars includes 2 billion dollars for Halloween candy and 350 million dollars for pet Halloween costumes.

Yes, you read that correctly.  We are collectively going to spend 350 million dollars on Halloween costumes for our cats and dogs.

Overall, spending on Halloween has risen by more than 55 percent since 2005.  It just seems like Americans can’t get enough of this particular holiday.

But of course what Americans spend on Halloween is not even worth comparing to what Americans spend on Christmas.

According to the National Retail Federation, more than 90 percent of Americans celebrate either Christmas, Kwanza or Hanukkah.

And Christmas in particular has become virtually synonymous with materialism.  This year, the National Retail Federation is projecting that Americans will spend more than 600 billion dollars just on Christmas.

That represents a huge chunk of our GDP as a nation.

Most of that money will be spent on Christmas gifts.  According to a Gallup survey that was just released, the average U.S. adult plans to spend 781 dollars on Christmas gifts this year, which is significantly up from last year…

Americans’ initial estimates of the total amount they will spend on Christmas gifts this year point to an above-average holiday season for the nation’s retailers. While Gallup’s October spending forecast is a warm-up to its key measure in November, it finds Americans expecting to spend $781, on average, up from $704 last November.

Of course holiday spending does not end there.  There are trees to put up, packages to send out and decorations to buy.  The following numbers are from a Forbes article about what an average American typically spends during a Christmas season…

Christmas Tree: $41.50

Cards And Postage: $32.43

Floral Arrangements: $22.61

Food And Candy: $95.04

Decorations: $51.43

Travel: $960.50

So where is all of this money coming from?

That is a key question.

If our incomes were going up, all of this spending might be good news.  But as the following chart from the Federal Reserve demonstrates, that is not the case…

Median Household Income Since 2005

Our incomes are stagnant at best.  But Americans always like to party as if it were the best of times.  So they will pull out their credit cards and spend what they feel they need to spend in order to feel happy once again this year.

But deep down most people realize that this debt-fueled party cannot last forever.

Deep down most people realize that we have some incredibly serious long-term problems that need to be fixed.

Sadly, no matter which political party occupies the White House, and no matter which political party controls Congress, our long-term problems only seem to get even worse.

As our problems have multiplied, over time Americans have become angrier and angrier.

And right now is election season, and so that is very bad news for Democrats

Nearly 7 in 10 Americans are angry at the direction the country is headed and 53% of Americans disapprove of President Barack Obama’s job performance, two troubling signs for Democrats one week before the midterm elections, a new CNN/ORC International Poll shows.

Democrats are battling to try and save the Senate majority, while hoping to prevent more losses in the House, which the GOP controls by a 234 to 201 margin.

In the Senate, Republicans need a net gain of six seats, and several state polls in the past month of contested races show that Democrats are in danger of losing control of the majority, and thus Congress.

If the Republicans do take control of both houses of Congress, will that fundamentally change the direction of the country?

I wish that I could believe that, but at this point most Republicans are virtually indistinguishable from most Democrats.

In other words, it is very hard to tell them apart.

As a nation, we are steamrolling toward a date with oblivion, but everyone is trying to put such a happy face on things.

Well, enjoy this time of relative stability while you can, because it is going to end way too soon.

Americans May Be Getting Poorer, But At Least We Are Getting Fatter And Sicker

I know, there really isn’t any good news in that headline.  Americans are steadily getting poorer, fatter and sicker and yet most people continue to operate under the delusion that things are somehow going to get better.  Sadly, not only are we not better off than we were four years ago, the truth is that things have been getting worse for a very long time.  Median household income in the United States has declined for four years in a row, and it has fallen by more than $4000 overall since Barack Obama has been in the White House.  Yet the media insists that we are in the midst of an “economic recovery”.  A higher percentage of Americans are obese or severely obese than ever before, and Baby Boomers are much sicker than their parents were at the same age.  Yet we are supposedly a “health conscious” nation.  Technology is advancing faster than we have ever seen before in human history, but the life expectancy of poor Americans has dropped significantly in recent years.  So exactly what in the world is going on here?

It seems like there is a health food store or a vitamin store on almost every corner, and yet as a whole we are in much worse condition than our parents were.  The following is from a recent news story by the CBS News affiliate in Washington D.C.….

Obesity among baby boomers is more than double the rate of their parents at the same age, and boomers with three or more chronic conditions was 700 percent greater than the previous generation.

But it isn’t just the Baby Boomers that are obese.  Sadly, obesity has become a raging epidemic in America and all of the numbers show this.

For example, a study by the RAND corporation discovered that the percentage of Americans that are severely obese rose from 3.9 percent in the year 2000 to 6.6 percent in 2010.

That is a huge increase in just a decade.

And the numbers are even more sobering when you look at the percentage of Americans that are just obese (rather than being severely obese).

As I wrote about the other day, 36 percent of all Americans are considered to be obese, and it is being projected that by 2030 that number will rise to 42 percent.

To put that in perspective, it is important to note that only 13 percent of all Americans were obese back in 1962.

Sadly, not only are we getting fatter, many of us are also living shorter lives.

In a previous article, I quoted a CBS News story that discussed recent research which shows that the lifespans of poor Americans have been dropping rapidly in recent years….

Overall life expectancy has dropped for white Americans who have less than a high school diploma to rates similar to those of the 1950s and 1960s, new research finds.

The study found non-Hispanic white men without a diploma lived on average until 67.5 in 2008, three years less than they did in 1990. The drop in lifespan was even bigger for non-Hispanic white women with low education: They live five years shorter than 1990 rates, from 78 years old to just 73.5.

Why are people not living as long?

Well, our lifestyles certainly are not helping things.  The average American watches 28 hours of television every single week.  That is not conducive to a long and happy life.

But of course a lot of other factors are at play as well.

When you don’t have a lot of money, you can’t afford to eat healthy and you can’t afford to go see the doctor much.

Unfortunately, average Americans have steadily seen their incomes drop even as the cost of living has continued to go up.  The following is from a recent article posted on Investors.com….

Since 2009, the middle 20% of American households saw their average incomes drop 4%. In 2011 alone, they fell 1.7%. The poorest 20% have fared even worse under Obama, Census data show. Their incomes have dropped more than 7% since 2009, and are now lower than they’ve been at any time since 1985, after adjusting for inflation.

Median household income (adjusted for inflation) fell in 41 U.S. states between 2000 and 2011.

So which state saw the worst decline in median household income during that time period?

Would you be surprised to hear that it was Michigan?

Between 2000 and 2011, median household income in Michigan dropped by a whopping 18.9 percent.

I have written extensively about how Detroit is a perfect example of where most of the rest of the country is headed.  The manufacturing facilities are being torn down and Detroit has become a rotting shell of what it once was.

You can see 30 pictures of the ruins of Detroit right here, and you can view a great video of a homeless man giving a very creepy tour of Detroit’s abandoned Michigan Central Station right here.

So what part of the country do you think has done the best over the past decade?

If you guessed Washington D.C. you would be correct.

Median household income in Washington D.C. increased by 18.1 percent between 2000 and 2011.

Of course this “prosperity” for the D.C. area can be directly attributed to the explosion in the growth of the federal government.

Members of Congress and government workers are living the high life at your expense, and much of it is being done with borrowed money that we expect our children and our grandchildren to repay.

You would be absolutely shocked to learn what goes on at some of these federal agencies.  For example, the following was revealed by a former Social Security Administration employee recently in the Baltimore Sun….

It is not uncommon to see employees taking lunches lasting up to two hours. Often, a day at the office is nothing more than seeing people sleep at their desks or watch movies on their computers. With a few exceptions, employees with goals and expectations of some sort are nowhere to be found inside the walls of SSA.

I once saw an older employee take 10 smoke breaks in one afternoon and do absolutely no work when he was at his desk. He told me he was just waiting it out until he could get more retirement money. Several elderly individuals literally died right at their desks because they refused to retire. A lack of professionalism was obvious in the way the employees dressed and most apparently in their juvenile, non-professional language.

Would you like to have a job where you can sleep at your desk, take two hour lunches and watch movies on your computer all day?

If so, then working for the federal government might be for you.

Of course this does not happen at all federal agencies.  At some agencies the employees actually are very professional.  However, there are other agencies that are even worse than the Social Security Administration.

The sad truth is that what is wrong with our society is not limited to the White House and Congress.  They are simply a reflection of who we have become.  Our problems are very wide and very deep.

So why do you think Americans are getting poorer, fatter and sicker?

Please feel free to post a comment with your thoughts below….

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