‘An Economy In Extreme Difficulty': US Jobs Report Hides Economic Truths

Although the latest US jobs report did indicate that 312,000 new non-farm jobs were added to the economy in December of 2018, it should by no means suggest that the US economy is functioning in a perfect manner, Richard Wolff, professor of economics emeritus at the University of Massachusetts, Amherst, told Sputnik.
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"If you're a serious person in terms of understanding the economy, you know that the economy, like the human body, like a society, or like any complicated institution, has lots of ways of measuring how well it's doing," Wolff, who is also the founder of Democracy at Work, told Radio Sputnik's Loud & Clear on Friday.

​"You need to be open to the different measures, and then you need to do the very difficult thing, which is to face the reality that different messages give you different insights… and then put them together to come up with some type of composite understanding."

"If you don't do that, if you latch yourself on to one or another index or sign or measurement, you're going to bounce all over the place and misread the situation," he added.

​After carrying out his own analysis of the US economy, reviewing the goings on with the stock market and tariffs imposed by the Trump administration, Wolff explained to host John Kiriakou that his outlook for the US isn't exactly filled with roses and butterflies.

"This is an economy in extreme difficulty," he said. "It has a political leader, and you can't tell one day from the next what he's going to do… you have a political leader who is also willing to disrupt the world economy, as his tariff wars are now doing, in ways that may aggrandize him politically but cause all kinds of grief and trouble in the world economy."

"You have a slowing situation in both Europe and China. These are things that are profound, long term, ramifying kinds of economic challenges," Wolff stressed.

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Federal Reserve Chairman Jerome Powell recently indicated at a moderated discussion at the American Economics Association in Georgia that the US' central bank wouldn't be pushing interest rates higher, saying that officials would be keeping a watchful eye on how the economy evolves.

During the talk, which included the likes of former Fed chairs Janet Yellen and Ben Bernanke, Powell also noted that he would not be quick to resign, should US President Donald Trump make the request. Trump has repeatedly criticized Powell for his past decisions to spike interest rates.

But at the end of the day, nothing is written in stone, and who's to say what will ultimately happen on the economic front, Wolff told Kiriakou.

"Bottom line: The crisscrossing of contradictory pressures on the American economy, on the president and on the Federal Reserve means that they're all saying a variety of things, but the truth is nobody knows exactly how this is going to play out," he said.

The new jobs report also indicated that unemployment rose to 3.9 percent and that the labor force participation increased to 63.1 percent.

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