Admittedly, I haven't read the article yet, but can you explain why they are doing this now? All indicators seem to suggest the economy is strong, so why are they resorting to tactics we last heard about in 2008?
The problem is finance is by far the largest sector of the US economy, so when you look at aggregate GDP numbers, the US economy looks great because the modest gains in finance are more than compensating for the huge reduction in output in the smaller sectors. It's the same story for the stock market: the market cap of the stock market is heavily weighted towards technology stocks, which is compensating for the poor performance in lagging sectors.
We haven’t hit target inflation, because labor costs have been resisting upward pressure due to underemployment. The fed thinks it can paper over structural problems with cheap money, resulting in capital asset price inflation and increased wealth disparity...furthering barriers to real wage growth.
That is only true when the President has an (R) next to his name. (D)-type Presidents do not enjoy this privilege from the Fed.
It's doing great if you ignore budget deficit, multiple debt balloons (national/municipal/auto/student), and looming trillions of unfunded liabilities. What could possibly go wrong?
Real income/wages are flat, the many tariffs and economic policy choices made by the current administration has slowed if not stopped manufacturing (steel tariffs especially), the rate of auto loan defaults is at a record high (see 2008 mortgage crisis), and worse. Adding $1 trillion of debt per year is insane and would send 2008-2016 debt hawks into a tizzy yet the current admin vastly increased the deficit over the previous administration. Most of this is tax cuts from the 2017 bill which disproportionately go to corporations and super wealthy. Tax cuts for corporations do not expire whereas those for citizens will sunset. These tax cuts have led to massive stock buybacks which artificially buoy the stock market (which is why it's the only 'good' thing about the economy as a whole right now).
The best news of each monthly job report, jobs gained, has been rolled back by later reports allowing the administration to trumpet growth and improvement but leave out how off the numbers really are each cycle. Also, most of the 'new' jobs are part time, low wage, low skill, or gig economy work that often doesn't pay a livable wage or is a supplement to another low paying or part time job. That pattern does not lend itself to a strong, robust economy but can create a short term projection that appears so.
We recently hit a known recession indicator where the Treasury yield curve inverted. An inverted yield curve occurs when long-term yields fall below short-term yields like when 1 year bonds have higher interest than 10 year. usually the long term investment has higher returns except when analysts or brokers predict a crash is coming. Since this metric was tracked, we have entered a recession within 24 months every single time the curve has inverted. This includes the negative bond rates we saw after 2008. Today we might be paying too much attention to this indicator for it to still work that way but it's still important.
For all intents and purposes, the Trump economy is not good, flat, and falling. We may see a massive correction once stock buybacks end or are banned, corporate taxes are raised by a liberal congress, or any number of policy changes. Manufacturing is set for layoffs and reductions through 2020 (see US Steel closing sites in Michigan) and I'm personally saving for a down payment on a house when the market crashes in my area.
I'm curious, what indicators are you going off to think they 'all' suggest the economy is strong? It may be your sources are lying by omission or spinning information to look good when it isn't a real representation of the economy, like pointing to stock market highs that mean almost nothing. We've crossed 26000 in the Dow averages like 5 times in the current admin, that isn't stable at all but a pattern of rise/fall boom/bust that is not sustainable.
I do not seem to find confirmation to the above.
Instead there seems to be slight growth in hourly earning, according to this
https://www.bls.gov/news.release/pdf/realer.pdf
(page 5, Jan 2020):
- Dec 2018: +1.3
- Oct 2019: +1.3
- Nov 2019(p): +1.1
- Dec 2019(p): +0.6
Mar 2019: -.3
Apr 2019: -.2
Oct 2019: -.2
Dec 2019, -.1 (noted as a .1 lift but a .2 CPI increase to offset to -.1)
Other sources do show a low growth rate vs a flat line, but it is still much slower than before the 2008 crisis: https://www.bls.gov/news.release/realer.nr0.htm
"From December 2018 to December 2019, real average hourly earnings increased 0.7 percent, seasonally adjusted. The change in real average hourly earnings combined with a 0.6-percent decrease in the average workweek resulted in a 0.1-percent increase in real average weekly earnings over this period."
A .1% real average weekly earnings increase YoY is hardly worth writing home about and more a sign that something isn't working for most Americans. It's basically flat.
you will see exactly the numbers I have posted.
I think you are looking at >".. Real average weekly earnings decreased 0.2 percent over the month due to the decrease in real average hourly earnings combined with no change in average weekly hours. Chart 2: Over-the-month percent change in real average hourly earnings for production and nonsupervisory employees, seasonally adjusted, December 2018–December 2019 ..."