Employment Graph Looking Pretty Hot

It seems as though half of the headlines in the United States right now center around the recent Presidential election. A headline you may have missed this morning was concerned with weekly jobless claims, which came in at 251,000, well below the figure considered healthy by most economists, 300,000.  In fact, jobless claims have been lower than 300,000 for 90 straight weeks!  This is the longest stretch of initial claims this low since the 1970s.

You might be connecting these dots or you might not. President-elect Donald Trump announced his Presidential campaign on June 16th, 2015.  That was about 70 weeks ago. So, for 20 weeks leading up to that announcement, employment numbers were actually looking very strong.

Meanwhile, Trump ran his campaign with slogan "Make America Great Again" during most of those 70 weeks. Most Americans believed that Trump was talking about the economy, but they could have perceived this to be related to something else. Who knows?

What can be measured?

A recent Gallop poll suggests that Americans were thinking about the economy when they elected Trump. This can be seen in a 13 point increase in economic confidence immediately following the election.  

As an added bonus, stocks rallied, hitting all time highs. Bonds collapsed, pushing interest rates higher. There are high expectations going forward. 

As an investor, what do you get with low unemployment, high consumer confidence, a sky high stock market, higher interest rates, and a changing political climate?  That's right. A looming recession.  Good luck America.