Austrian-lites, who held the bizarre view that the economy was going to crash after the December 2015 Federal Reserve interest rate hike have been slapped in the face by reality once again.
Private-sector hiring accelerated last month fueled in part by new construction jobs, according to a report released today.
Private payrolls across the nation rose by 298,000 in February, said payroll processor Automatic Data Processing Inc. and forecasting firm Moody’s Analytics. This was much better than the 188,000 jobs expected by economists polled by The Wall Street Journal, and more than the 246,000 jobs ADP said were added in the previous month.
Even Drudge has recognized the boom:
The boom, though, has nothing to do with Donald Trump. Back in early November 2016, just before the election when mainstream thinking was that a Trump victory would tank the stock market, I advised in the EPJ Daily Alert, to BUY the U.S. stock market regardless of who won That the main driver of the economy was Fed monetary manipulations and that the Fed had filled the system with new money.
Since the 2015 hike, there was a hike in Fed interest rates in 2016 and another hike is likely at next week's Fed meeting--and still no crash in the stock market.
That may change down the road. I am tracking in the ALERT a number of factors that may change things later in the year but the idea there would be a serious problem after the first Fed rate hike and that it would have to be reversed (with possibly negative rates!) highlights the inability of Austrian-lites to understand that it is a boom-bust cycle and that there are significant boom periods in the Fed manipulated economy.
Just to make clear, this boom is about Fed manipulation and not Donald Trump, here is the chart that shows employment in the private sector started climbing long before Trump became president, while he was still "firing people" on the Apprentice.