Saturday’s New York Times lead desperately tried to spin away the strong Trump economy by warning of hypothetical dangers from a tax cut plan that’s not passed into law yet or even set in stone yet: “Sizzling Economy Carries Warning: Tax Cuts May Burn – Concerns of Inflation – Jobs Report Lifts Trump but Raises Specter of ‘Boom-Bust Cycle.” It's a churlish pattern on the part of the paper, which resolutely refuses to give President Trump any credit for the economy -- while blaming him for social tensions and even an alleged rise in hate crimes:
The economy’s vital signs are stronger than they have been in years. Companies are posting jobs faster than they can find workers to fill them. Incomes are rising. The stock market sets records seemingly every month.
The latest evidence of the revival came Friday, when the Labor Department reported that American employers added 228,000 jobs in November. The unemployment rate held steady at 4.1 percent, the lowest since 2000. Job growth has slowed since its peak in 2014 but remains remarkably steady: For the first time on record, employers have added jobs every month for more than sevcen years – 86 months to be precise.
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That strength could also pose challenges, particularly in light of the $1.5 trillion tax cut that Congress could pass as early as this month. Economists expect the tax bill to provide at least a modest lift to the economy -- but they are not sure that’s a good idea.
With unemployment so low and the economy fundamentally healthy, a tax cut could lead the economy to grow too quickly, pushing up inflation and forcing the Federal Reserve to raise interest rates faster than planned.
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For now, however, the figures present a political opportunity for President Trump, who ran for office on a promise to revive the American economy.
The Times has blamed Trump for the rise in hate crimes, but he apparently has nothing to do with the continuing confidence being shown in the U.S. economy:
Economists almost universally say Mr. Trump has had little to do with the rebound, which began long before he was elected and has not accelerated meaningfully since he took office. But with unemployment low and wages beginning to creep upward, voters may be more inclined to give credit.
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Wherever the credit lies, workers are benefiting from an economy that is delivering broad-based gains in income and employment for the first time in at least a decade. Groups that were left behind in the early stages of the economic recovery, such as African-Americans and people without a college degree, have seen their unemployment rates drop sharply in recent years.
Loathe to award Trump credit, Casselman told a story of strong economic growth, interspersed with warnings about the spectre of inflation lurking in the shadows -- caveats the paper dispensed with during the Obama recovery:
And although wage growth remains disappointing, household income -- which reflects not only hourly pay rates but also how many people have jobs and how many hours they are working -- has shown strong gains, particularly for poorer households.
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Business could get even busier soon. The Republican tax plan aims to encourage business investment by cutting corporate taxes, which could increase demand for the big projects -- hospitals, airports, office building -- that make up a big part of McCarthy’s business. In fact, Mr. Bolen said, many clients are already making plans on the assumption that the legislation will pass.
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Rising pay would be good news for workers. But it could cause concern at the Federal Reserve, where policymakers have been gradually raising rates and paring the Fed’s bond holdings in a bid to keep inflation in check.
The Fed is all but certain to raise interest rates at its meeting next week, and has signaled plans to do so three times next year as well. But if inflation starts to pick up, the Fed could be forced to act more quickly than it wants, with unpredictable effects on financial markets and the economy.
It’s part of a pattern of Times stories dumping cold water on strong economic figures. A front-page story from late October was headlined “Economy’s 3% Spurt Emboldens Tax Cut Supporters (and Critics).”
A front-page headline from August: “As Jobs Grow and Dow Climbs, Trump Takes Credit. Should He?” It’s hard to imagine the Times not giving President Obama credit, as shown in this good news economics story released at the height of the Obama-Romney matchup, which championed far weaker numbers than the ones Donald Trump can brag about:
The jobless rate abruptly dropped in September to its lowest level since the month President Obama took office, indicating a steadier recovery than previously thought and delivering another jolt to the presidential campaign. The improvement lent ballast to Mr. Obama’s case that the economy is on the mend and threatened the central argument of Mitt Romney’s candidacy, that Mr. Obama’s failed stewardship is reason enough to replace him.....Unemployment fell to 7.8 percent from 8.1 percent, crossing what had become a symbolic threshold in the campaign.
Below 8% unemployment? Wow!
