March 21, 2017
As part of my monthly calculation of the size of the actual labor force (for the purpose of analyzing the monthly employment report), I use the U.S. population as determined by the “Population Clock” on the home page of the U.S. Census Bureau. As I write this, it stands at 324.73 million. This figure typically grows at the rate of about 180,000 per month. That’s a scary rate of population growth. The U.N. estimates that half of all world population growth by 2050 will be caused by the growth of the population in only eight nations – seven third world nations and – you guessed it – the United States, the only developed nation that continues to experience third-world-like population growth.
But I’ve noticed something strange in the last six months, and especially since the beginning of the year. In December, the population clock actually fell back by almost 600,000. Since then, the population has been growing at a rate of only about 80,000 per month. Today, it stands at almost exactly the same level as it did at the end of September.
This is great news, but I suspect that some of the reason for the slowdown is not good news. You may recall that sometime back around December, the CDC announced that death rates in the U.S. were rising while life expectancy had actually declined slightly. But there’s some really great news too. Illegal immigrants are being deported and the entry of new illegal immigrants has slowed dramatically. Even legal immigration has slowed since Trump took office.
Although it’s still early in this new trend, a couple of observations are in order:
- Most economists predict economic gloom and doom to accompany a lack of population growth. Contrary to that, the U.S. economy has experienced its best growth in many years in the past six months. A brightening economic outlook is one of the outcomes I predicted in Five Short Blasts that would accompany a stabilizing or even declining U.S. population.
- A rising death rate is another outcome that I predicted in my book for nations whose population densities continue to grow beyond a critical level, driven by rising unemployment and poverty.
This is all something I’ll be watching closely as immigration continues to slow dramatically during the Trump administration.
March 15, 2017
The employment report for the month of February (the first full month of the Trump administration) was released on Friday and the numbers looked pretty good. The economy added 235,000 jobs and the unemployment rate fell one tenth to 4.7%. President Trump hailed the news and declared that, though the employment reports during the Obama administration were fake, that the February numbers were very real.
Let’s examine that claim. First of all, take a look at this chart: Labor Backlog. Some explanation is in order. “Actual labor force growth” is the growth in the labor force if it had grown at the same rate as the overall population as it does in reality. The “BLS reported labor force growth” is the growth in the labor force that the Bureau of Labor Statistics uses to calculate the unemployment rate. The “change in employment level” is a figure taken directly from the BLS monthly data. It’s the growth in the number of people who report being employed in the household survey. The “labor force backlog” is the difference between the growth in employment level and the “actual labor force growth.” If the employment level grows faster, then unemployment should decline along with the “labor force backlog.”
Note that during the Obama years, the BLS consistently reported less growth in the labor force than what the growth in the population would suggest. Only in 2012 and 2015 did the BLS report labor force growth that was slightly above actual growth. The result is that the “labor force backlog” grew steadily during the Obama administration until it peaked at the end of 2014 at 6,359,000 workers who were unemployed. By the end of 2016, that backlog had fallen only slightly to 5,994,000 workers. In spite of that, according to the BLS, the unemployment rate plummeted from 9.9% in 2008 to 4.7% in 2016. That’s impossible and the only way that the BLS was able to make it appear that the unemployment rate was dropping was by claiming that workers were dropping out of the labor force or by not growing the labor force as the population grew, or through some combination of those factors. Thus, when Trump claimed that the employment data was “fake” during the Obama administration, he was exactly right. If you’ve been a follower of this blog, you know that it’s something that I maintained all along throughout the Obama administration.
OK, so how about Trump’s claim that the numbers now are “real?” So far, in January and February, the BLS has reported growth in the labor force of 416,000 workers. The actual growth in the labor force – if it grows in proportion to the population – is only 89,000 workers. In other words, so far in 2017, the BLS now claims that 327,000 “missing” workers have reappeared in the work force. That supports Trump’s claim that his numbers are real. But time will tell. Two months’ of data isn’t nearly enough to judge how honest the Trump administration is being when it comes to the employment reports. It’s something I’ll watch just as closely as the Obama numbers.
March 8, 2017
The U.S. trade deficit for the month of January was posted yesterday by the Bureau of Economic Analysis. It was horrible. President Trump took office on January 20th, but he can hardly be held responsible for any of the January results. This is all on former President Obama.
How bad was it? The overall trade deficit rose to its worst level in nearly five years – $48.5 billion. At $62.1 billion, the deficit in manufactured goods just missed its all-time worst reading of $62.5 billion set in March of 2015. As you can see from this chart, if the trend in manufactured goods continues, we’ll have a new record very soon and, without the change in trade policy promised by President Trump, it will likely get worse from there: Manf’d Goods Balance of Trade.
Then there’s the export numbers. In January of 2010, lacking the courage to take on the problem with imports, President Obama vowed to double exports in five years in an effort to turn the U.S. into more of an export-driven, Germany-like economy. It never happened and never even came close. In January of 2017 – seven years after Obama made that promise – total exports, at $192 billion – remained below the October, 2013 level. Worse yet, exports of manufactured goods were below the level reached in September, 2011 – up only 26% from when Obama made that promise. And that increase was due entirely to global economic recovery from the 2009 recession and had nothing to do with any real improvement in America’s export position.
So that closes the book on Obama’s trade policy, which was a total failure. Actually, if President Trump follows through on his promise of tariffs (or border tax, or whatever you want to call it), this closes the book on a seven-decade-long experiment with free trade and globalization, begun in 1947 with the signing of the Global Agreement on Tariffs and Trade that, by any measure of its effect on the American economy, has been a complete disaster.
- America’s trade surplus dwindled until we ran our last trade surplus in 1976.
- 41 consecutive years of trade deficits has yielded a cumulative deficit of $14.4 trillion. During that time, the national debt, which is closely linked to the trade deficit, grew by $19.4 trillion. In 1976, the national debt was only $0.5 trillion. Virtually all of our national debt is due to the cumulative trade deficit since 1976.
- During this period, family incomes and net worth have declined, our infrastructure has crumbled, and our nation has been bankrupted. The manufacturing sector of the economy has been gutted. More than ten million manufacturing jobs have been lost. The United States, once the world’s preeminent industrial power, has been reduced to a skid-row bum, begging the rest of the world to loan us money to keep us afloat.
This is all on you now, President Trump. You own it. You’ve promised to straighten out this mess. America is watching and waiting.