The Trump economy continued to roar ahead with 263,000 jobs created in April 2019 — 236,000 of those jobs in the private sector. The unemployment rate dropped 0.2 percent to an almost shocking 50-year low at 3.6 percent.
When coupled with the just-announced first-quarter Gross Domestic Product (GDP) estimate of 3.2 percent inflation-adjusted, annualized growth, the economy appears to have smooth sailing for the short-term future.
But because our job is to also point out foreseeable headwinds, there are a number of yellow flags that popped up in the just-released Labor Department report.
First, at least a portion of the drop in the unemployment rate was directly related to a significant decline in the number of Americans in the workforce, and for the third month in a row, job growth in the very important manufacturing sector has been tepid to non-existent with only 12,000 manufacturing jobs created since February 2019.
These lag signs argue against Congress and President Trump becoming complacent in their handling of fiscal issues impacting our nation’s economic growth and indeed the continuation of the currently robust workforce.
An example of an action which Congress should begin tackling and passing now is the U.S.–Mexico–Canada (USMCA) trade deal that would replace NAFTA (North American Free Trade Agreement). In a very modest estimate of the economic value of the USMCA, an International Trade Commission report (https://www.usitc.gov/press_room/news_release/2019/er0418ll1087.htm) found that the deal would add $68.2 billion to the U.S. economy and create 176,000 new jobs. Manufacturing would experience the “largest percentage gains in output, export, wages and employment,” the report found.
Additionally, the rumblings that Congress is considering increasing gasoline taxes to pay for additional infrastructure spending would negate some of the wage gains that are finally being realized across the workforce. These wage gains along with the tax cuts that the vast majority of people received have spurred the increases in consumer spending, which many economists claim drove the GDP increase in the past quarter.
President Trump’s agenda is working because it has unleashed the pent-up U.S. economy through a combination of tax and regulation cuts and better trade deals. Now, Congress needs to work with him to further support the U.S. economy.
Rick Manning is president of Americans for Limited Government (ALG). The organization says it is a “non-partisan, nationwide network committed to advancing free-market reforms, private property rights, and core American liberties.” This op-ed is drawn from a news release the ALG issued on May 3.