This article was originally published by Michael Snyder at 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.
In fact, one study has concluded that the U.S. economy could lose more than 400,000 jobs as a result of these tariffs on Mexico. The following comes from CNN…
If the 5% US tariff on all goods from Mexico takes effect and is maintained, more than 400,000 jobs in the United States could be lost, an analysis released this week found.
The tariffs on Mexico, set to go in effect on Monday, would cost Texas alone more than 117,000 jobs, according to the analysis by The Perryman Group, an economic consulting firm. Texas is Mexico’s largest export market, making the two economies closely intertwined.
And the truth is that those numbers could actually be on the low side.
According to Marc Thiessen, a trade war with Mexico would literally put millions of U.S. jobs at risk…
Indeed, Mexican tariffs could be even more devastating for Americans than those imposed on China. Deutsche Bank estimates the tariffs could raise the average price of automobiles sold in the United States by $1,300. Indeed, U.S. and Mexican auto-supply chains are so deeply integrated that many parts cross the border multiple times before they end up in a finished vehicle — which means they would be hit by tariffs multiple times, compounding costs. Ten million U.S. workers’ jobs depend on this supply chain; tariffs would put those jobs at risk, including those of the “forgotten Americans” in the industrial Midwest whose jobs Trump vowed to protect.
We shall see what happens, but the outlook for the U.S. economy for the rest of this year is not good at all, and beyond that things look exceedingly grim.
Hopefully, I am wrong, but it certainly appears that a major economic downturn is developing just in time for the 2020 presidential election.
There is one more thing that I would like to mention before I wrap up this article. This week, a Russian news source reported that Russia and China “will sign an agreement” regarding the use of their own national currencies in bilateral trade with one another…
Russia and China will sign an agreement on possible payments in national currencies. A decree of the Russian government on signing of a relevant agreement with the Chinese side was released on the official portal of legal information on Wednesday.
According to the draft decree approved through that government document, “settlements and payments for goods, service and direct investments between economic entities of the Russian Federation and the People’s Republic of China are made in accordance with the international practice and the legislation of the sides’ states with the use of foreign currency, the Russian currency (rubles) and the Chinese currency (yuan).”
In other words, they are dumping the dollar in favor of their own national currencies when trading with each other. This is a direct threat to the international dominance of the U.S. dollar, and other countries have been discussing similar moves.
For decades, the U.S. dollar has essentially been a global currency. More dollars are actually used outside of the United States than within this country, and most Americans don’t realize that.
This has given us some enormous advantages in the global marketplace, and it could be just a matter of time before those advantages begin to disappear.
Things that used to take months or years to happen are now happening in a matter of days. The pace of change is really picking up, and right now the momentum of events is heading in a direction that is definitely not favorable to the United States.
Michael Snyder is the author of four books, including Get Prepared Now, The Beginning Of The End, and Living A Life That Really Matters.
Being self employed nearly 30 years, I can’t even qualify for unemployment benefits if work stops. Even though I pay a min 12% self employment tax every year, which is twice the amount for working employees at only 6% Fica, and who can qualify for unemployment, if they are layed off.
“Employment growth just plunged”
Trying to make something out of nothing. More fake news
Employers pay for UI, not workers. Who are you expecting to pay for your UI if you’re self-employed?
You’re not missing anything. Even those of us who are “conventionally” employed don’t get to collect unemployment. The state standards for searching for work that doesn’t exist is astounding. If they don’t think you are looking hard enough by their standards they make you give the money back. It use to be that you looked for work based upon your last job, benefits, education, background, and previous salary. Now you are required to take any job out there (mainly low income temporary gig jobs with limited hours, no medical, no benefits, no 401K — no nothing. This government stiffs its own citizens while providing free everything and welfare for illegals, who have more protections under the law than its own citizens. This country was made on the backs of slaves. That’s what they want. And that’s what they want back. Slavery that, this time, is not limited or biased by any race, color, creed or religion.
And if all that isn’t enough and you do qualify for unemployment compensation, it is taxed by Feds and states just like a paycheck from a job whether the amount is taken out per check or later when you file taxes. Of course, the paltry amount you get from unemployment compensation is barely enough to get gas for the car or a few trips on the bus so you can interview. It is no where near enough to subsist upon while searching for a job.
While the employment growth (rate) is slowing, the participation rate in the economy is the highest ever with record unemployment among all classes & racial groups.
There are currently ONE MILLION JOBS available for those wishing to work. No takers, so of course, the employment rate is declining. I think this is a question of perspective: whether the glass is “half empty” or “half full”.
That said, the entire world is in a slow down and that would affect the US as well. In othyer news, Consumers appear to be very confident, perhaps overly confident as they are taking on purchases of new trucks & SUV’s; with higher average monthly payments and longer terms.
The Consumer is always the last to know. Buckle up. Keep stacking & packing. 🙂
“The following comes from CNN”.
There is something wrong with people that
want to use information from CNN.
My understanding is that we cannot fill the job
openings we have, be that due to location, skill sets,
or they don’t want to hire older people.
It is hard to produce new jobs when you can’t
or won’t fill the openings you have.
A recession is going to happen, it is long past due and
is not due to recent Tariffs. Recession is our part of our normal cycle that we get when prices, debt, and government policies exceed what the society can tolerate. My reasoning for a
recession/depression in a non-war economy is
simplistic, but K.I.S.S is always best.
Tariffs DO contribute to an economic slowdown as businesses, investors, & consumers adapt to the new economic reality.
There will be pain initially, but eventually a level playing field will restore the prosperity of the American worker, family, & taxpayer.
Remember the pain the New World Order inflicted upon US as they systematically transferred 70,000 factories and tens of millions of American jobs to China.
Once you understand that, biting the bullet for TRUMP TARIFFS will not be so distaseful. 🙂
There are grown white men working at Wendy’s in Arkansas.
If there were jobs everywhere we wouldn’t be seeing that.
If Russia, China, and other Countries are starting National currencies not connected to international currencies, are the Countries of the world ending their dependence not only on the US dollar but on the “Federal” Reserve and debt perpetuated by the International Central Banks?
Should we begin to print National money for our internal use like John Kennedy and Abraham Lincoln did? Is it finally here, the start of our return to being free once more?
Behind every cloud is a silver lining.
Still, it’s always a good time to prepare for bad times.
Russia & China are attempting to start a competing world financial system to circumvent and undermine American control of the current World Order.
It is not the number or size of the additional “national currencies”; neither the size of the population or land mass: but the size of the economies in each system in dollar terms.
International banking and finance is controlled by the US and its Western Allies. Those countries wishing to participate in the Western System must participate according to the Rules, or find themselves pissing in the wind. 🙂
Honeypot, this might be a tough pill to swallow. But we are much closer to one-world currency than most folks realize. Globalists have ALREADY taken control the central banks worldwide including China, Russia, and the US. They ALREADY have the ability to initiate the ‘global economic reset’ (THEIR phrase since 2104) by action or inaction. The end game is them ‘rescuing’ all nations with one global currency and one world government.
Ridiculous one might say? Just read the words of globalists. They speak right out in the open now. Read the mission statement of the CFR. Read Montanan Brandon Smith going back to 2010. His record is arguably the best of any political/economic analyst today.
We have a OWC. Its the Federal Reserve Note controlled by the FEDERAL RESERVE. More than 80% of all international transactions globally are conducted in the FRN.
That’s why China & Russia want their own financial system and why Americans want their dollar back. 🙂
another Arknacide. Its off topic. However a former state Rep who divorced her circuit judge husband, Has been found dead at her home in Pocahontas ar. The thing is her husband along with Senator Nick Wilson and the Clintons where In cahoots. stealing money from the DHS when bill was Governor of Arkansas. Its rumored she was helping prosecuters to recoup $600,000 of that stolen money. and a rep from Oklahoma has also died he was involved in the investigation.????
It was on campaign signs, everywhere, shouted at many rallies, and televised over the whole country. So, I’m calling it relevant.
Barry should have proven his eligibility, prior to running, and T should have had binding support for his campaign promises, prior to going public with it. One track mind, instead of 5d chess BS. Work completed, not promises.
T, like slumlord bosses, needs to bring tangibles to the table. Instant gratification is expected by every deadpan literalist, down here on planet Earth. It’s how we talk and how we pay, how we measure and how count, when we expect to be taken seriously.
I believed in what he said, only wish that he did, too.
There was no DHS when Clinton was governor of Arkansas.
G.W. Bush, President (actually Cheney) started it.
But you’re probably right about both Clintons.
T hasn’t come anywhere close to restoring the social contract to WASP masculinists, and what has been promised to replacement demographics has probably come from the globalists, in exchange for special drawing rights upon our land, food, and water.
Anyone who can’t see that is either running a news aggregator script or is a personality cultist, all day, every day. OP might even know what his name was put on.
~~ Probably, a sabbatical after Pentecost / Shavuot, and improve my corner of this planet.
I maintain that demoralization / destabilization begins and ends in one’s own home. Go newsblind and radio silent. Get your own house in order. Leave Edward Bernays’ sons high-and-dry.
Bernays was Sigmund Freud’s nephew.
“Deutsche Bank estimates the tariffs could raise the average price of automobiles sold in the United States by $1,300.”
Who, in their right mind, listens to what Deutsche Bank has to say? Their stock is trading below $6.00. They are going to go Lehman at any moment. Who actually listens to anything Deutsche Bank says?
Gezus. They’re a “bankster” for crying out loud.
“The tariffs on Mexico, set to go in effect on Monday, would cost Texas alone more than 117,000 jobs . . .”
What a load of baloney. The US corporate oligarchs have already out-sourced all the American jobs to Mexico already.
This is just complete MSM driven propaganda; more fear-mongering by a corrupt and criminal US congress and senate, owned, bought and paid for by the narco-state Mexico.
Tell the truth.
Oops. Not any more. Meihico promised very nicely to help out, at it’s own, southern border, with a cherry on top.
Marc Thiessen is a paid shill for Fox News. And does Michael Snyder even bother to research anything anymore? Does he know he’s quoting an opinion piece Marc Thiessen wrote about himself, using himself as a source?
“. . . a trade war with Mexico would literally put millions of US jobs at risk . . .” WTF?
Propaganda at its finest. Nice job, Mikey Snyder. Guess running for political office really gave you a good opportunity to get up close to that punch bowl. Mikey wants more Kool Aid.
There is no problem with the economy as it is fake anyway. That fake economy needs to reset anyway furthermore the economy is like the stock market now, and by that i mean it artifically goes up and down and the power brokers earn a profit by buying low and selling high
I can say for a fact large companies are laying off. We lost our hold division at my employer recently. Guess what the division work is not ceasing, being shipped to Czech republic and India. The old cheaper workers thing again. The companies took the tax breaks and sent the work offshore that is what is going on everywhere. There is a corp mass exit again of US workers to foreign countries while pocketing the money.
Many employed people I know are underemployed. They’re in jobs they are way overqualified for because there are more of those jobs than mid to high level positions.
They said they can’t find a job utilizing their 10-20 years experience and advanced skills so they had to take whatever they could get = underemployed. And its not about age discrimination as they are in their 40s. Its about not enough jobs to go around and a lack of jobs being added monthly.
We are already in a recession, many just don’t know it yet.
Because it hasn’t hit them or affected them in any way. But make no mistake, it’s already started and it will gradually get progressively worse from here.
By this time next year, the recession will be full blown.