Experts speaking to Bloomberg were baffled at the current state of Donald Trump's economy as it enters an unprecedented version of a trend known as the "jobless boom" that could leave the U.S. more vulnerable to a recession.
In a piece published on Wednesday, Bloomberg explained that the U.S. economy under Trump appears to be in a rare state where job growth has stagnated while the overall economy is growing, a phenomenon known as a "jobless boom." The outlet reported that a forthcoming GDP report this Friday is expected to show that the economy grew at a "solid pace" of 2.7 percent last year. Employment, meanwhile, is barely budging, with Bloomberg citing another report that showed only around 15,000 jobs were added a month last year, a far cry from the initial expectation of nearly 50,000.
While the U.S. has undergone such a trend in the past, what makes the current situation so unprecedented is the fact that past instances began with a recession. The U.S. economy is not currently in a recession, at least not officially, marking a first in the postwar era," according to Bloomberg. The outlet warned that one might not be far off, however, as a strong labor market is typically seen as "the main firewall against a recession," citing what Michael Pearce, the chief US economist at Oxford Economics, wrote in a recent report.
Experts and others in the labor field who spoke to Bloomberg were alarmed about the trends they were seeing and uncertain about where it is all heading. Danielle Williams, who was recently laid off from her still-new job as a lead recruiter, told the outlet how unprecedented the current conditions appear.
“I’m very familiar with the labor market and market trends because I have been in the recruiting industry for the past 12 years,” Williams explained. “This market has been really crazy, unlike anything I’ve ever seen.”
Diane Swonk, the chief economist at KPMG, likened the economy to a "one-legged chair" and shared concern about stability going forward.
“We have never seen anything later in an expansion like what we are seeing today, and that’s what makes it so unusual and hard to judge about where we are going,” Swonk said. “At the end of the day we are sitting on a one-legged stool, which is not the most stable place to be.”