Economy Is Weaker Than It Seems & Scary Facts On National Debt
1. US Unemployment Rate Dropped to 4.9% in October
2. Why the US Economy is Weaker Than It Looks
3. The National Debt: Why No One is Talking About It
Before I get into today’s topics, I think I speak for most Americans when I say that we are relieved that this election will finally be over late tonight or early tomorrow. This has been the ugliest and most embarrassing election in most of our lifetimes.
Both candidates have the highest “unfavorable” ratings in history, and many Americans had to hold their noses to vote for either one of them. How this came to happen in 2016 will be the subject of countless debates in the months and years ahead, regardless of the outcome.
This election featuring two highly unpopular and ethically-challenged candidates has divided America as never before. And sadly, neither candidate has what it would take to unite the country. Likewise, neither candidate will have the overwhelming support of Congress to get things done going forward.
I predict it will be a long four years no matter who wins. I hope I am wrong but I doubt it.
As for today’s topics, we’ll start with a look at last Friday’s unemployment report for October, which was met with mixed reviews. Next, we’ll look at some new analysis following the better than expected 3Q GDP report which I wrote about last week. Unfortunately, the latest news suggests that the economy is not likely to repeat that performance in the 4Q or next year.
Regarding our ballooning national debt of $19.8 trillion, there is new analysis on what happens when interest rates go back up to normal levels in the next few years. I’ll offer some new statistics that may disturb you, but they are facts we all need to know. Let’s get started.
US Unemployment Rate Dropped to 4.9% in October
The Labor Department’s Bureau of Labor Statistics (BLS) reported on Friday that the official unemployment rate dropped to 4.9% last month from 5.0% in September. That was a little better than the pre-report consensus of 5.0% again.
The economy created 161,000 new jobs last month, down from the 170,000 expected and below the 181,000 monthly average over the last year. That was a little disappointing. The good news is that the BLS revised upward its jobs numbers for September and August by an additional 44,000 new positions created.
Wages in private sector jobs jumped 10 cents an hour to $25.92, up 2.8% (annual rate), the strongest 12-month gain since mid-2009. As you can see below, the trend in wage growth is healthy, but we’re still well below levels seen before the Great Recession.
The Labor Force Participation Rate unexpectedly declined modestly in October, falling 0.1% to 62.8%. The participation rate remains the lowest since the mid-1970s.
Finally, the U-6 unemployment rate – which includes discouraged workers, part-time workers who would like a full-time job and “marginally-attached” workers (who can’t look for a job for one reason or another) – fell to 9.5% from 9.7% in September, an eight-year low.