The election season is heating up, U.S. Republican Presidential candidate Donald Trump has pulled back even with Democrat candidate Hillary Clinton and every new economic number is being scrutinized for its supposed political meaning.



The unexpectedly soft August jobs report will lend a little political advantage to Trump. Overall, jobs came in 30,000 to 40,000 below expectations. Goods-producing and manufacturing jobs decreased, wages were near-flat and retreated to 2.4 percent year-on-year, the private and manufacturing work weeks fell and overall hours dropped.



However, this is far from a catastrophe. Jobs still climbed by 150,000 or so. And the third-quarter ending in September will probably generate near-3 percent growth, as inventories reverse course and start rising again. These numbers may well lend some political advantage to Clinton.



But if you look under the economy¹s hood, you¹ll discover a business recession that has been going on for quite a while. Profits, productivity, business investment, and ISM manufacturing are all down. According to Chapman University professor, Mark Skousen, business-to-business supply-chain activity — which hardly anyone looks at — has been hurting for well over a year. And bank loans are in a slump.



If these trends continue, jobs and wages will continue to slip.



So, what¹s to be done?



Well, if you have a business recession, which could easily spread to consumers, the policy fix has nothing to do with whether or not the Fed raises its target rate by a quarter point. Nothing to do with the Fed.



Instead, the trick is to help business with new incentives. And that¹s why I have been for Trump¹s tax-reform plan since last winter.