When he was campaigning for the presidency, Donald Trump repeatedly said he was going to bring millions of jobs back from overseas and create millions more new ones. He promised that Americans would win so much that they would get tired of winning.
But the winning ended Friday when the Labor Department announced that for the first time in seven years, the American economy actually lost jobs. 33,00 of them to be exact. An increase of 80-90,000 jobs had been forecast for the month of September.
While some economists said the job losses could be blamed on Hurricanes Irma and Maria, others noted that inflation is now rearing its head for the first time in decades, and that could lead the Federal Reserve to raise interest rates. Larry McDonald, head of the U.S. macro strategies at ACG Analytics, told CNBC:
“For the first time in potentially a decade we’re actually looking at real wage pressure. The slack in the labor force is finally dissipating. Young people were just not working, but now they’re finally coming back. That’s what going to shock the Fed.”
The jobs report also showed that average hourly earnings were up by 12 cents in September to $26.55 That’s a 2.9 percent gain in wages for the year. The Fed normally believes healthy inflation growth is about 2 percent. The latest figures may mean the Fed will soon increase the prime rate, which could be bad news for the housing industry and anyone thinking of taking out any sort of loan. It could also prompt companies to raise the price of goods across the board, which would be bad news for consumers.
Winning? Right now it would appear that Trump has managed to reverse the positive trend in employment in nine months. Expect lots of defensive tweets from the president in the days ahead.
Featured Image Via NBC News