It’s a bad month for the economy and here’s why — for now

It’s been a bad month for the status quo: plunging consumer confidence and a lack of jobs growth, and now word that oil prices are in free fall. The former, of course, is bad news for the auto industry; the latter is no help for oil traders.

We get lots of economic news every day, and we’ve already been through the hard-news updates — sales reports, job numbers, inflation rates — and heard many economists talk about fresh, shockers. But one doesn’t have to be Andrew Haigh to see that GDP — the gross domestic product measure used by the government — growth is a funny thing, often hanging on an index of private businesses in addition to government activity.

When we hear about low consumer confidence, not so much — consumer spending accounts for roughly two-thirds of all economic activity. When consumers are happy, that turns the GDP number into a cheerier figure. A declining economy, conversely, has people worried, and so sales and hiring slow.

A good bit of data have arrived in the past couple of weeks that let us know a recession has a chance, even if it’s for a short period. That’s fine as far as it goes. But given the idea that the end of the year and the first quarter are right around the corner, we need to see more data that point in the opposite direction. So far, no such data — not signs of consumer spending, not jobs, not inflation.

It’s good to see construction and manufacturing hiring come through so far in 2018. But this still doesn’t seem the case with overall employment growth. New ticker-tape stories come and go on the economy, but the unemployment rate, steady for years, has ticked up recently. On Friday morning, that tick was no different, but the devil in the details is that the official rate rose by just 3/10ths of a percentage point from an already low 4.1 percent. (The gray line in the chart below is the official rate; the red line is the unemployment rate in November, when it reached 4.2 percent.)

That rate is bound to grow because of an increase in job openings and an increase in job openings for less-skilled positions. What the data don’t show, however, is any growth in the overall number of workers in the United States.

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