This Wasn’t Supposed To Happen: U.S. Employment Growth Just Plunged To The Lowest Level In 9 Years
This Wasn’t Supposed To Happen: U.S. Employment Growth Just Plunged To The Lowest Level In 9 Years by Michael Snyder for The Economic Collapse Blog
If the U.S. economy was heading into a recession, we would expect to see a slowdown in the employment numbers, and that is precisely what is happening. According to payroll processing firm ADP, the U.S. economy only added 27,000 new jobs in May, and that is way below the number that is needed just to keep up with population growth. Of course some in the mainstream media are attempting to put a positive spin on this, but there really is no denying that this is a truly awful number. In fact, we have not seen a number this bad in more than 9 years…
Job creation skidded to a near-halt in May in another sign that the U.S. economic momentum is slowing.
Companies added just 27,000 new positions during the month, according to a report Wednesday from payroll processing firm ADP and Moody’s Analytics that was well below Dow Jones estimates of 173,000.
The reading was the worst since around the time the economic expansion began and the jobs market bottomed in March 2010 with a loss of 113,000.
9 years is a very long time, but this terrible employment number is perfectly consistent with all of the other horrible economic numbers that have been rolling in lately.
Time after time in recent weeks I have been using phrases such as “since the last recession” to describe what we are witnessing. The U.S. economy has not been in such rough shape in nearly a decade, and things just keep getting worse.
So how did Wall Street respond to the latest employment news?
Actually, stock prices surged, because investors are super excited about the prospect that the Federal Reserve could soon lower interest rates…
Stocks added to strong week-to-date performance on Wednesday as investors grew even more confident that the Federal Reserve will lower interest rates this year to reignite an economy wounded by trade battles.
The Dow Jones Industrial Average rose 207.39 points to 25,539.57, while the S&P 500 advanced 0.8% to 2,826.15. The Nasdaq Composite closed 0.6% higher at 7,575.48.
Pushing interest rates all the way to the floor certainly helped the stock market recover after the last recession, but this time around there is a major twist.
The U.S. is currently engaged in a major trade war with China, and the normal tools that the Fed utilizes may not be powerful enough to overcome the negative effects of such a conflict.
And to make things worse, now the U.S. is also starting a trade war with Mexico. On Wednesday, President Trump made it clear that “not nearly enough”progress had been achieved during negotiations with Mexican officials…
President Donald Trump said “not nearly enough” progress was made in talks with Mexico to mitigate the flow of undocumented migrants and illegal drugs, raising the likelihood that the U.S. will follow through with tariffs next week.
So tariffs will be slapped on Mexican goods starting on Monday, and President Trump seems quite excited about this…
“If no agreement is reached, Tariffs at the 5% level will begin on Monday, with monthly increases as per schedule,” Trump tweeted Wednesday. “The higher the Tariffs go, the higher the number of companies that will move back to the USA!”
Of course the Mexicans will almost certainly retaliate, and both countries will start seeing higher prices and significant job losses.