Democratic front-runner former Secretary of State Hillary Rodham Clinton wasn’t kidding when she said May 12 that she’d assign her husband, former President Bill Clinton, to “revitalize” the economy. Getting the bad news today about the May jobs report, adding only 38,000 jobs, U.S. employers seem to have put hiring on hold as corporate earnings seem to have evaporated. While the nation’s unemployment rate dropped to a nine-year low of 4.7%, over a half-million Americans stopped looking for work, dropping the labor-participation-rate down to 62.6%, a four-decade low. Federal Reserve Board Chairman Janet Yellen hoped to continue hiking interest rates, pending news about the economy. News of the 38,000 non-farm payroll jobs surely gives Yellen reason to pause in June and maybe indefinitely. Economists have warned of a looming recession in 2017.
Hillary’s main argument for her election hinges on President Barack Obama’s economic record, now beginning to unravel at the worst possible time. Hillary can’t have it both ways: Touting Obama’s economy, while, at the same time, asking Bill to “revitalize” it. An economic downturn during the run-up to the November 8 general election spells trouble for Hillary, knowing she’s tied to Obama’s economy. Spending eight years trying to fix the economy, Obama finds himself on the short-end-of-the-stick, trying to convince voters that things are getting better. “The shockingly low payroll gains in May provided further evidence that the economy is showing clear signs of slowing,” said Laura Rosner, an economist with BNP Paribas. More slowing could morph into a recession in 2017. Yellen’s lost much of the Fed’s ammo with interest rates only one tick about record lows.
Buried in the unemployment report are untold numbers of jobs seekers either giving up entirely or finding only minimum-wage part-time jobs. Low-wage part-time employment counts in the current unemployment number. Calling May’s Labor Department report a “terrible jobs report” and “bombshell,” GOP presumptive nominee real estate tycoon Donald Trump highlighted Obama’s economic failures. Today’s dismal jobs report was especially bad news for high school, non-college educated jobs seekers, with some 250,000 high school-educated workers losing their jobs. Trump commands strong backing from high school educated voters. “The high school jobs are gone and they’re not coming back,” said Anthony Camevale,” director of Georgetown University’s Center for Education and Workforce, pessimistic about bringing back manufacturing jobs.
Trump’s staked his economy message on rewriting bad trade deals, like the North American Free Trade Agreement [NAFTA], signed into law by Clinton Dec. 8, 1993. Trump contends that the free trade pact shipped untold numbers of U.S. jobs to Canada, Mexico and other countries. “It’s driven by a fundamental shift from an industrial economy to a post-industrial economy,” said Camevale, forgetting that it’s still possible to bring back U.S. manufacturing jobs. When you consider that most foreign automakers have set up shop in the Deep South and other parts of the country, it’s proof that the post-industrial economy can be reversed. Trump also railed against the ungratified Trans Pacific Partnership [TPP], promising to ship more jobs to Asia. May’s dismal jobs report, mirrors the downward trend over the last three months, averaging about 116,000 jobs a month, down from over 250,000.
Hillary would like nothing more than to blame Trump for today’s lethargic economic news. She’s stuck with Obama’s economic policies heavily dependent on global trade deals like NFTA and TPP. Trump’s warned that without renegotiating these deals, Camevale’s forecast of a permanent post-industrial society could be irreversible. Today’s foreign automotive manufacturing proves that if government officials insist on bringing back U.S. manufacturing jobs, it will happen. High school graduates, or those with some college, depend on bringing back manufacturing jobs to the U.S. Trump promised to bring back manufacturing jobs and prevent more companies from moving to Mexico, Canada and China. Hillary finds herself caught between-a-rock-and-a-hard place backing Obama’s economy, while, at the same time, insisting her husband can fix a deteriorating economy.
Speaking Monday at the World Affairs Council in Philadelphia, Yellen will most likely signal rate hikes are on hold for the foreseeable future. With U.S. Gross Domestic Product growing only 0.8% in Q1, Yellen already had pressure on her to put rate hikes on hold. With manufacturers, construction companies and temporary work agencies shedding jobs, it looks like the global economic slowdown is finally hitting the U.S. Today’s bad jobs report helps Trump make his case that something must be done differently in the next four years. If fear of recession grows, it’s going to present stiff headwinds for Hillary going forward. Voters sitting on the fence today can’t afford another four years of stagnant economy growth. Trying something new only helps Trump make his case to U.S. voters. If economic trends persist, it’s going to make Hillary a very tough sell.
