US Gains 2.5 Million Jobs Consensus expectations of economists was a loss of 7 million. That's a 10 million job differential. So, what gives? These people are not stupid, but I think perhaps political bias is colouring the forecasts. Although hard to believe now, most commentators predicted a stock market crash if Trump got elected. Dow was 18,300 at the time. Then they predicted assorted wars, which never came to pass. They simply hate the President so much that they're painting a gloomier picture than is actually the case. The funny thing is that by doing this, it's making Trump look good even though the real economic outlook remains bleak!
When you stop to think about it logically, why would unemployment rise when so many people are reopening businesses? It doesn't make sense. Why would you lose 7 million jobs if many people are going back to work? It just shows how groupthink can get people into trouble.
And the thing is, the real economy is still in rough shape, US unemployment is 13.3% plus it's believed there are an additional 3% who filled out the forms incorrectly, which means unemployment is around 16.3%. That's a very deep hole to crawl out of, but a lot better than 20% plus. Not to mention the US national debt is now $25 trillion and rising, and the Fed has a $7 trillion balance sheet they can't unwind. And although many businesses have reopened, we don't know how profitable they are. Restaurants and airlines can't afford to run at low volume for long. And coronavirus is still not going away.
Yet by jumping the gun and painting a picture of complete Armageddon, Trump's opponents have managed -- once again -- to make him look good! They keep making the same mistake of overplaying their hand.