OPINION:
When President Trump signed the tax cut bill around the end of 2017, the most significant pro-growth legislation since the 1980s, the U.S. economy took off like an Atlas rocket.
Employment rose, unemployment sank, consumer spending took off, the stock market shot up, and the U.S. economy was back in business — after eight years of the lackluster Obama economy.
But now it appears that key sectors of the economy are losing steam in the midst of a global slowdown. Consider these examples:
• The U.S. Commerce Department reported earlier this month that consumer spending fell by 0.5 percent last December, the largest decline in nine years.
• “Small-business hiring slowed in February, according to payroll provider ADP. Businesses with as many as 49 employees, added only 12,000 jobs last month, down sharply from 107,000 in the previous month.
• “December’s result means that spending for the [fourth] quarter decelerated significantly, a primary factor in the slowing of the economy in the last three months of the year,” the Associated Press reported.
• The sharp decline in spending extended into durable manufacturing goods such as autos. The Institute for Supply Management reported that its manufacturing index declined to 54.2 percent from 56.6 percent.
• An ISM survey found that manufacturers blamed the decline on Mr. Trump’s tariffs and the global slowdown.
• The Federal Reserve reported last week that the U.S. economy “cooled in the first two months of 2019, with economic growth described as “slight-to-moderate” across most of the country.
“About half of the districts noted that the government shutdown had led to slower economic activity in some sectors,” the Fed survey reported.
The central bank’s survey of its 12 regional Fed banks through Feb. 25 found that many companies reported “concerns about weakening global demand, higher costs due to tariffs and ongoing trade policy uncertainty.”
Automakers reported a decline in U.S. sales this month, suggesting that there will be a downturn in sales for the year.
Toyota, with nearly a dozen manufacturing plants in the United States, reported declining sales of its Camry sedan, Tundra pickups and minivans, as did Fiat Chrysler, where sales fell 2 percent, and Nissan whose sales in the United States dropped 12 percent.
One shining sector in the U.S. economy is housing starts which rose sharply by 18.6 percent in January, as builders ramped up single-family home construction.
The Commerce Department said the spike in home building “occurred at a seasonally adjusted annual rate” of 1.04 million, according to the Associated Press.
Overall, though, the economy’s picture in one of pluses and minuses.
“The breakneck pace of hiring slumped in February, a sign that U.S. growth is cooling, though strong wage growth and earlier robust job gains suggest the economy’s near decade-long expansion will endure,” the Wall Street Journal reported last weekend.
On the negative side, U.S. nonfarm payrolls rose to a seasonally adjusted 20,000 jobs in February, according to the Labor Department. That’s the “slowest pace for job growth since September 2017…. falling below economists’ expectations for 180,000 new jobs,” the Journal reported.
But this weak job figure followed stronger job payroll reports in January (311,000) and (227,000) December.
That plunged the unemployment rate to 3.8 percent in February, and wages “grew at the fastest pace in nearly a decade,” the Journal said.
“The labor market has really stood out as the lone bright spot in a sea of more mixed numbers,” said Scott Anderson, chief economist at Bank of the West.
The latest report, he said, “is just catching up” to the mixed economic picture,” he told the Journal.
But the latest jobs picture shows danger signs ahead for the Trump economy: Finding enough workers to fill the growing job openings.
Construction employment fell 31,000 last month, and leisure and hospitality openings were flat. Payroll growth has slowed in the manufacturing sector, too.
Don’t be surprised to see U.S. industries urging Mr. Trump to open the nation’s immigration spigot to fill badly needed jobs to keep pace with a growing economy.
Donald Lambro is a syndicated columnist and contributor to The Washington Times.
Please read our comment policy before commenting.