The jobs numbers released Friday by the Department of Labor sent a chill throughout the financial world, with the markets ending down slightly and increasing talk of a possible recession increasing.
Reuters reports the jobs numbers revealed the slowest growth in a year and a half:
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“The meager payroll gains reported by the Labor Department on Friday were the weakest since September 2017, with a big drop in the weather-sensitive construction industry.
“The sharp step-down in payrolls was another blow to President Donald Trump who has suffered a series of setbacks in recent weeks, including failed nuclear talks with North Korea, a record goods trade deficit despite his administration’s ‘America First’ policies and the economy missing the White House’s 3 percent annual growth target in 2018.”
Heidi Shierholz, senior economist and policy director at the Economic Policy Institute and a former chief economist at the Labor Department, tried to put a happy face on the dismal jobs report:
PEOPLE! Yes only 20k jobs were added in February but please do not start freaking out about a recession. One month does not make a trend. One reason for the February weakness was harsh weather, depressing job growth in construction, hotels, and restaurants. #JobsReport
— Heidi Shierholz (@hshierholz) March 8, 2019
But not everyone was as sanguine as Shierholz. Economist Sung Won Sohn noted that the economic recovery is approaching its 10th year, a sign that we might be near the end of the line and due for a reversal:
“To be sure, the aches and pains associated with the aging economic recovery are beginning to show up. The unemployment rate … is in the process of bottoming.”
HuffPost reported earlier this year that the signs do seem to point to a recession in the horizon. They studied 4 leading indicators:
- Stock market
- Yield curve
- Job market
The job market is of particular interest at the moment:
“Another major number that could point to an imminent recession is unemployment. And counterintuitively, it’s a low rate of unemployment that often signals a slowdown.
Recently, unemployment dropped to 3.7 percent ― a nearly 50-year low. Wages are also growing at the fastest rate since 2009. According to Forbes, strong job market statistics like these indicate that we’re reaching the end of the latest economic cycle rather than the beginning. In fact, an unemployment rate below 4 percent ― which is quite rare ― has often immediately proceeded past recessions.”
Is the Trump recession about to begin? The signs certainly seem to point in that direction, but predicting anything when it comes to the economy is a risky proposition. The March job numbers should tell us if February was an anomaly or the start of trend.
Featured Image Via CNN Screenshot