The November jobs report released Friday had few negatives, so the mainstream media took another tack in suggesting the strong growth meant the tax cuts working their way through Congress were unnecessary.
The country added 228,000 jobs, salaries inched up, as did hours worked per week in what was called an unexpectedly robust report. This meant not good news but bad – it meant the Federal Reserve could increase rates next week and that the economy was hot enough already.
“Since the country is already close to full employment, some economists questioned the White House’s push for corporate tax cuts intended to enable companies to hire more workers,” wrote NBC News on its website.
“’The labor is in great shape. Tax cuts should be used when the economy needs tax cuts, and it doesn’t need tax cuts right now,’ Joel Naroff, chief economist at Naroff Economic Advisors, told Reuters.”
The New York Times headlined its story: “Job Growth Signals Robust Economy, With Gain of 228,000,” and began with a recitation of the numbers. But under the subhead “The Takeaway,” it offered the same analysis as NBC.
“The American job market is the strongest it’s been in a decade, and arguably the strongest since 2000,” the Times stated. “The United States has now added jobs for 86 consecutive months – a downward blip in September was later revised to show a small gain – and the unemployment rate is lower than it ever got during the last boom, which ended when the housing bubble burst.”
Then, after describing the White House’s reaction to the news, the Times added this: “Economists expect the bill to provide at least a modest lift to the economy – but they aren’t sure that’s a good idea. With unemployment so low and the economy fundamentally healthy, a tax cut could lead the economy to overheat, pushing up inflation and forcing policymakers at the Federal Reserve to raise interest rates faster than planned.
“’It’s a very poorly timed fiscal stimulus,’ said Joseph Song, an economist at Bank of America. ‘It kind of raises the risk of a boom-bust cycle.’”
Two paragraphs later, the Times suggests a pump-priming opportunity such as the tax cuts before Congress might be a good idea.
“Economists aren’t sure how long the growth can continue,” it stated. The unemployment rate is approaching full-employment levels, and the labor force participation rate, which fell to Depression-era levels under President Obama, has been inching back up.
“That suggests that a wealth of job opportunities (such as would be created under the tax plan presumably) could be drawing people into the workforce.”
This, too, was bad. “’I think there is a bit more slack to be burnt off,’ Mr. Song said. ‘There are still people on the sidelines that are looking to come back to the labor market.’”
The Washington Post acknowledged the economy was booming but discounted the possibility the tax cuts would help.
“Scott Anderson, chief economist at Bank of the West, said it’s tough to draw a line between tax cuts and economic growth,” the Post wrote. “’Historically, when you see tax cuts, there’s been no strong correlation there,’ he said. ‘In my view, if I’m a CEO and I’m seeing tax cuts for my organization, I might give those tax cuts back to shareholders.’”
Politico took care to point out this is the ninth year of recovery and that gains were outsized somewhat because of a return to normal following the hurricanes. It then ran the same Naroff quote as NBC, minimized the impact with the same words as the New York Times – “short-term boost” – and diminished any gains that might flow from it electorally.
“’This may help the Rs for the 2018 election,’” it quoted economist Marc Zandi as saying. “’But it will really complicate the election in 2020.’”