In a new report released on Thursday that bolsters President Trump’s chances of reelection, the ADP Research Institute and Moody’s analytics said private sector employment increased by 195,000 jobs from July to August, surpassing the estimates that employment would increase by 140,000 new jobs.
Bloomberg reported, “Businesses’ payrolls increased by 195,000 after a downwardly revised 142,000 gain in July, according to the ADP Research Institute. The latest data compared with the median estimate of economists for a 148,000 increase. A separate Labor Department report Thursday showed filings for unemployment benefits were little changed last week, near the lowest level since 1969.”
The Wall Street Journal added, “The U.S. Department of Labor’s Bureau of Labor Statistics will release its August nonfarm jobs data on Friday. Economists polled by The Wall Street Journal are expecting 150,000 jobs to have been added and for a 3.7% unemployment rate.”
Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, stated, “In August we saw a rebound in private-sector employment. This is the first time in the last 12 months that we have seen balanced job growth across small, medium and large-sized companies.” Mark Zandi, chief economist of Moody’s Analytics, added, “Businesses are holding firm on their payrolls despite the slowing economy. Hiring has moderated, but layoffs remain low. As long as this continues recession will remain at bay.”
The report found that small businesses increased by 66,000 jobs, medium businesses by 77,000 jobs, and large businesses by 52,000 jobs.
On Thursday, CNBC’s Jim Cramer, noting that President Trump is standing firm in his trade war with China, stated, “President Trump is set in his ways because he doesn’t see any weakening. I mean, look at the jobless report today; someone earlier said that manufacturing is in a recession. Well, manufacturing’s been in a recession in this country for ages. What I’m surprised at is how strong the consumer is. I think the Chinese still need it more than we do. I know when I say that everyone just says, ‘But wait a minute; that’s a nice bias that you’re showing.’ It’s statistical; I just think our economy is very strong.”
As The Daily Wire reported, Neil Irwin, a senior economics correspondent for The Upshot, wrote in The New York Times that fears of a coming recession are overblown, basing it on a number of factors, including:
1. The sectors affected by trade wars and a diminution of global manufacturing only represent a “relatively small share of the economy.”
2. There is little sign of reduced consumer spending, and consumer spending comprises over two-thirds of the American economy; business investment represents 14%;
3. The Federal Reserve has embraced easier money policies since the beginning of 2018, and that kind of shift usually evidences itself in delayed fashion, so it hasn’t been factored in yet;
4. The unemployment rate has stayed at 4% or lower for over a year, which may very well trigger employers to think more long-term and not panic and opt for actions that would inhibit longer-term growth;
5. Despite the fact that business investment seems to be slowing, there are numerous instances in which business investment slowed but consumer spending still grew. Irwin names a few instances, including mid-2015 to mid-2016 and the period after the dot-com crash in 2000 and 2001;
6. The impact of the trade war has most profoundly affected manufacturing and commodity-related industries; Irwin notes, “As of August, only 8.5 percent of American jobs were in manufacturing.”
7. The American economy has shifted toward a more service-based economy, leaving it less vulnerable;
8. A Wall Street Journal survey of economists found only roughly one-third think a recession is forthcoming.