(ThyBlackMan.com) Here is a commonsense question for all of us to ponder. How can you have a full employment economy, which is what Trump’s April 4.2% unemployment rate indicates, and the economy is facing a recession? What Mr. Trump is saying is, 96 American workers out of every 100 American workers were fully employed in Trump’s economy in April in Jobs that should be paying a living wage. That’s what a full employment economy looks like! That’s right, 96%. That means out of every 1000 American workers, 960 of them are working full-time at good paying Jobs. In other words, the nation right now has a booming economy, based on Trump’s unemployment numbers!
Can two things be right at the same time when it comes to this issue, that is having a booming full employment economy and facing a recession? The answer is no. A full employment economy means the economy is fully utilizing its productive resources (labor) at its potential output (at its highest), and the unemployment rate is at its natural rate (what it should be). Yet, the nation’s gross domestic product (GDP) – the total value of products and services – declined at a 0.3% annual rate, down from growth of 2.4% in the final three months of 2024. Essentially, the economy has turned downward. Basically, President Trump is just playing games with our unemployment numbers. Go to TheFixThisTime.com for more details.
A full employment economy is a tight economy with a tight Job Market, where good paying Jobs are plentiful. Now, ask yourself do you feel like you are working in a full employment economy where if you quit your Job today, you would easily find another Job making similar or better income?
Bad data got us here economically, and if we are smart, we will use good data, facts, and experience to set the U.S. economy on a course of steady long term economic growth, while creating good paying Jobs. The United States is the number one economy in the world, and there is a reason, it is the number one economy in the world. It is not due to an accident, or some speculative reason.
Policymakers, including President Trump’s thoughts, when it comes to the economy, ought to be focused on improving the economic lives of American workers, not misleading them (lying to them) about unemployment rates. So, what should we do first for Americans, American workers, professional, blue collar, union, and working-class Americans, and we must not leave out retired Americans? Together as voters, we make up over 70% of the U.S. electorate. As a matter of fact, it was working-class Americans shifting their vote to Trump that helped him win the presidency.
Number one, we should stop underreporting our unemployment rates, misleading Americans about the real Job situation of the economy. Our most comprehensive unemployment rate for April, per the Bureau of Labor Statistics (BLS) economists, is 7.8%, and not 4.2%. With the wealthiest 10% owning over 90% of all stocks, what’s the credible argument for giving them more money through a Tax Cut sponsored by President Trump and Republicans, when the nation needs growth and Job Creation, due to that 7.8% Job rate. Investors and economists see the Real unemployment rate as 7.8%.
The solution becomes simple when it comes to improving our economy, if you use the true and most comprehensive unemployment rates. A 7.8% unemployment rate says, we should be growing our economy. That’s pretty simple, and it didn’t take a degree in rocket science to come to that conclusion (isn’t that, right?). When our economy grows, our pockets get fat. Let’s just use common sense, as President Trump likes to say.
So, why is the United States the number one economy in the world? It is because of Consumer Spending. It is because of consumers, you, all of us, spending money that makes us the number one economy in the world. Chinese leaders, an authoritarian government, recognize something about the U.S. economy, that they think is very powerful, that is overlooked by policymakers, in Washington D.C.; maybe intentionally or unintentionally; hard to tell these days. It is the power of U.S. consumer spending, that they readily recognize, as being powerful. Where the United States consumer spend their money, and with what country makes a difference and they know that. Since 1972, the U.S. has been spending its money in China.
Peng Sen, president of the China Society of Economic Reform, said in an article by Bloomberg News on 3/25/2025, “Authorities (the Chinese Communist party) should make efforts to boost consumption as a share of gross domestic product to 70% by 2035 from about 55% currently.” Peng’s remarks add urgency to calls for China to adjust its growth model as geopolitical tensions threaten to slow exports and returns on investment diminish. The Chinese government has made boosting domestic demand, particularly consumption (Consumer Spending), the top economic priority this year, although authorities didn’t put a number to that goal.”
President Donald Trump is asking for time to get some tariff deals done. Obviously, China is one of the nations with whom he wants to make a deal. However, conservative elites and the Main Street media have been critical of Mr. Trump when it comes to tariffs and trade deals. The Wall Street Journal wrote in an editorial on May 1, 2025, “The best response to the warning from the first-quarter GDP decline would be for Mr. Trump to call the whole tariff thing off. Short of that, settle for 10% across the board and call it a day. If that’s too much of a come-down, Republicans will need to pass a pro-growth tax cut and accelerate their deregulatory push as their best chance to liberate the economy from its tariff.”
When Bill Clinton used this mantra, in his defeat of George Bush, “It’s the Economy Stupid,” the national unemployment rate at that time was 7.8%; same as the April’s, 2025, most comprehensive unemployment rate, per the Bureau of Labor Statistics economists. The nation at that time was considered to be in a mild Recession. The Wall Street Journal editorial board elites are correct, in their desire to see President Trump propose and support the passage of a “pro-growth tax cut.” Such a tax cut deal will certainly give President Trump the time he wants to negotiate good tariff deals.
So, let us be matter of fact, precise and frank, as to what a “pro-growth tax cut,” looks like. Consumer Spending is responsible for creating approximately seven out of every ten Jobs in our economy. As a result of this fact, the United States is largely a 70% consumer driven economy, (what the Chinese want to achieve by 2035) with Consumer Spending accounting for a significant portion of our economic activity. Economic data supports Consumer Spending or personal consumption expenditures (PCE) typically accounts for 68-70% of U.S. gross domestic product (GDP) according to the Bureau of Economic Analysis (BEA).
So, it stands to reason, if you increase Consumer Spending, you increase economic growth, and Job creation. And the way to increase Consumer Spending is to give consumers more money in the form of a consumer tax cut. The most suitable group for the tax cut, you guessed it, is Baby Boomers. Let us look at the reasons why this is a smart move once the Federal Reserve finishes hiking interest rates. The 10%, $25,000 Baby Boomer Consumer Tax Cut will be deficit neutral. The Covid 19 recovery demonstrated that when you give a direct tax cut to consumers, who make up approximately 70% of your economic activity, you will create surplus revenues, making the tax cut deficit neutral.
Don’t take my word for it, let’s look at the numbers. The Treasury Department stated, the U.S. government posted a $119 billion budget surplus in January 2022. It was the first in more than two years, amid strong growth in tax receipts and a sharp drop in pandemic-related outlays.
The age group, beginning at 55 plus years, are currently responsible for approximately 40% of Consumer Spending in our economy. Baby Boomers are the largest homogeneous population, within that group of consumers. Consumption DATA shows, low-and middle-income Americans are more likely than wealthy earners to spend benefits, from the government immediately, and stimulate economic growth, creating millions of JOBS. Is America foolishly burying its head in the sand, ignoring the correlation between Consumer Spending and Job Creation? China isn’t and this will be the main reason China will overtake America, because of American politician’s selfish disregard of consumers, and Consumer Spending.
Staff Writer; James Davis
Mr. Davis is a Financial Analyst. His articles are about relating facts in a usable, truthful, and understandable way. That way, WE ALL WIN. James is, the author of three books, among them, “The Fix This Time,” Boost Your Retirement Income! Simultaneously Create Jobs and Spur Economic Growth (https://www.amazon.com/dp/B00MI3PD2M). Reach out to James @ his blog https://thefixthistime.com.
Question? Comment? One may use this email address; MrDavis@ThyBlackMan.com.
