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ICYMI: April’s Great Economic News

Trump economy
Not that we believe in or promote “conspiracy theories” you know, like the Trump campaign was spied upon by a corrupt Obama-era FBI and intelligence apparatus or that Robert Mueller and his team of angry Democrats flipped the innocent until proven guilty standard on its head in an effort to get President Trump. But there is one conspiracy we are convinced exits, and that is that the establishment media refuses to report good economic news.

If not for this conspiracy, what other explanation is there for this story getting buried: Across the board, April was a killer month for the US economy.

Americans’ spending in April increased by $40.8 billion or 0.3 percent, and Americans disposable personal income increased by $69.3 billion or 0.4 percent. That's in a report from the federal government's Bureau of Economic Analysis.

Our friend Rick Manning, President of Americans for Limited Government summed-up the real-world impact of those statistics this way:

For all the Wall Street hand wringing of late, Americans continue to have more disposable income than in the past, and they are even able to save part of it for the future.  That is great economic news.

What’s more observed Manning, “When combined with the latest report on the nation's Gross Domestic Product showing that our economy grew by 3.1 percent in the first quarter of this year, there are plenty of reasons for continued optimism about the economy moving ahead.”

Not only that, but the Labor Department reported that the U.S. economy added 263,000 jobs in April, far exceeding economists’ expectations of a gain of 190,000. The unemployment rate also dropped to 3.6 percent from 3.8 percent – a 50-year low.

“Wow, low unemployment, high jobs, high wages, big consumer confidence, major productivity and no inflation! It’s totally awesome, we’re killing it on the economy,” White House economic adviser Larry Kudlow said in a video posted to Twitter.

And, as our friend Adam Michel noted in a recent article for the Heritage Foundation’s Daily Signal, it is actually the poor, those who have been historically disenfranchised, people with disabilities, and lower-skilled workers who benefit the most from these rising economic tides.

In April, reported Mr. Michael, the unemployment rate for Americans with a high school degree fell to the lowest rates since before the Great Recession. Unemployment for workers with disabilities fell from 8% to 6.3% over the last 12 months, the lowest level since the measure began in 2008.

Hispanic unemployment is the lowest it has been since 1973 (also when the measure began). Black unemployment remains close to historic lows, climbing slightly since the end of 2018.

One could hardly wish for a better trend. This economy is working for every class of American observed Michael.

When the economy is strong and unemployment rates are consistently low, two things happen says Mr. Michael: First, job openings pull workers off the sidelines and into the workforce. People who had been so discouraged that they stopped looking for work start getting jobs again. That’s what we’re seeing. New York Times reporter Ben Casselman noted that more than 70% of new hires last month “weren’t actively looking for work, but got jobs anyway.”

Second, employers raise wages in order to keep good talent and attract new workers to fill job openings. And that’s happening, too. Until recently, wage growth had lagged behind expectations. Not anymore wrote Michael.

Following the 2017 tax cuts, the growth rate for average hourly earnings began to tick up, and over the past year, average hourly earnings rose by 3.2%. That’s a raise of roughly $1,400 in a year’s take-home pay. Before 2018, wage growth hadn’t reached 3% since 2009.

The recent wage gains have been largest for those who need it most observed Mr. Michael. For the last six months, wage growth for production and non-supervisory workers outpaced the average for the entire economy.

In the past year, wage growth was 6.6% for the 10th percentile of workers with the lowest incomes, according to the Annual Report of the Council of Economic Advisers. That’s double the 3.3% growth rate for workers at the top of the income distribution.

As poorer workers continue to benefit the most from the strong economy, we will see trends in wage inequality go down. By one measure, we have already “seen some narrowing of inequality, measured as wages at the top relative to the bottom,” as reported by Obama administration economist Jason Furman.

The American people seem to be internalizing all the good news noted Michael. Job satisfaction and consumer confidence are high. Workers have the highest job satisfaction since 2005, and satisfaction improved faster for lower-income households in the most recent data.

Thanks to the strong economy, Americans who aren’t happy at their current work are voluntarily leaving their jobs for better opportunities at the highest rate since 2000, when the measure started.

In addition, consumer confidence remains high after surging to an 18-year peak last fall, signaling that Americans are confident in the economy. Retirees are also more confident about their retirement security and ability to live comfortably on their savings, reporting the highest retirement confidence numbers since the early 1990s.

Of course even optimistic conservatives, like Adam Michael, see some grey clouds on the horizon, with the spending and deficit thunderboomer being the biggest and greyest  That, however, is a subject for another column, today we’re just going to enjoy reveling in the good economic news the establishment media refuses to report.

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