What do you know – the U.S. created 139,000 jobs last month, exceeding the consensus expectation of 125,000. Once again the liberal media, so intent on talking down the Trump economy, is proven wrong. They have consistently overestimated inflation (which is lower than it has been in 4 years), and underestimated growth. Their opposition to everything Trump – and especially tariffs – is unending.
That isn’t to suggest that everything is perfect. Growth is slowing for sure, which is why the president keeps calling for Fed Chair Powell to cut rates. Inflation is now below the Fed’s target, but Powell is on hold, expecting tariffs to drive prices higher. Maybe we will see some of that but Powell is supposed to be “data driven,” responding to what is being reported, not propaganda-driven.
As important, real average hourly earnings rose almost 4% compared to last year; the nominal income proxy was up 0.5% month to month. Combined with the Fed’s report that personal income increased 0.8% in April from March, households look to be in pretty good shape. That’s essential to continued growth.
Less encouraging was that the jobs number was revised lower by 95k for March/April.
What we are happy to see: federal government jobs, which boosted Biden’s economy, trending lower (down 22k in the month, 59k since the start of the year.) We have nothing against those who work for Uncle Sam, but the growth in that sector in recent years has not been productive.
But maybe most important was that the workforce participation rate dropped again, by 0.2%, to 62.4%. This figure indicates that too few people are working in our country and is a prime reason for the changes to Medicaid eligibility contained in the Big Beautiful Bill. Medicaid was meant to provide health insurance to those unable to fend for themselves—like single moms. Obama and Biden both loosened the rules as to who could receive those benefits and Medicaid has spiraled out of control. Reforming the program is one of the most important features of the BBB.
By the way, Musk is right to rail about the BBB; we would all like to see more cuts. But since he at the same time complains about losing EV credits, he puts himself in the same boat as Rick Scott and others: everyone wants less spending but cannot come up with a plan that will pass Congress. That’s the real world folks. At least the BBB has some positive changes. We need to get it done or the GOP can kiss goodbye to their majorities come the midterms!
