Scott Adams, the creator of legendary cartoon strip Dilbert, may have been right when he predicted that America’s perception of the Trump administration would pivot from “chaos and incompetence” to “effective, but we don’t like it.” To say that the White House has been submerged in controversy, much of it manufactured by the press, since the first day of President Donald Trump’s tenure would be an understatement. Yet, his pro-business agenda and America First initiative are making the labor market great again, which may prove the old adage correct come election day: It’s the economy, stupid.
So Much Winning – Jobs Edition
According to the Bureau of Labor Statistics (BLS), the U.S. economy added 224,000 new jobs in June, beating market forecasts of 170,000 and May’s disappointing 72,000 (revised from 75,000). The unemployment rate edged up from 3.6% to 3.7%, but with unemployment at near 50-year lows, this is still a positive development; 300,000 people entered the labor force to finish the second quarter.
Employment gains were seen in nearly every sector: education and health services (61,000), professional and business services (51,000), government (33,000), transportation and warehousing (23,900), construction (21,000), and manufacturing (17,000). Only retail and mining/logging reported declines of 5,800 and 1,000, respectively.
Average hourly wages ticked up six cents, or 0.2%, to $27.90; and average weekly hours held steady at 34.4 hours.
The report highlighted three major achievements for the Trump administration. In the first half of 2019, the U.S. has averaged 172,000 new jobs per month. For 121 consecutive months – a quarter of them having passed during Trump’s administration – the national economy has grown. In June, a record 157 million people were employed, the most since February, and the 19th record of Trump’s time in the White House.
But there are three other important accomplishments that Trump should celebrate ahead of 2020.
State of Labor Market
During the reign of former President Barack Obama, there were complaints about how the United States was metastasizing into a part-time jobs nation. This trend accelerated when the Affordable Care Act became the law of the land and businesses transitioned their personnel into part-time employees, a practice that reached an all-time high in July 2013.
While part-time employment is still at historic highs compared to the 1960s and 1970s, the data shows a downward trend in the age of Trump, particularly in the last 18 months.
Full-time jobs, however, have headed in the opposite direction. This level of employment did increase under Obama’s tenure, but Trump has enjoyed a meteoric ascent, hitting a record high in February 2019.
In the fallout of the recession, one of the biggest concerns had been the labor force participation rate, a measurement of people employed or actively searching for work. Since the turn of the century, the percentage of Americans in the labor force has been on a steep decline, slumping to a 40-year low. But the president has seen this figure top 63% four times – the preceding time it hit this mark was in February 2014. In June 2019, 62.9% of workers participated in the workforce, up 0.1% from May.
Contrary to what the left thinks about economics, politicians do not create jobs. But they can facilitate an environment that does stimulate job creation, which is what Trump and the GOP have done through tax cuts, fewer regulations, and, indirectly, a stronger dollar.
Hawk Eats Dove
Following the impressive jobs report, it appears the Federal Reserve might tergiversate and hit the pause button on a cut to interest rates. Despite the doves inside the Eccles Building being gung-ho about a future rate cut at their last Federal Open Market Committee meeting, policymakers may adopt a wait-and-see approach and postpone a rate cut until other data supports one.
Or, at the very least, the central bank may pull the trigger on a quarter-point reduction from the target range of 2.25% and 2.50% and freeze it, which could partially satisfy the frustrated Trump administration.
When he emphasized the better-than-expected jobs numbers during recent remarks, President Trump made an interesting point about his predecessor enjoying near-zero rates while he is witnessing a gradual normalization. Yet, the Obama and Trump economies are night and day. Not that this justifies slashing rates, but one can only imagine how the economy would perform if 45 received the same type of accommodation from the Federal Reserve as it gave 44. A “rocket ship” as Trump asserts, perhaps?
Sixty million Americans and the Ministry of Truth, AKA the Counterfeit News Network, may not like Trump’s performance, but it is effective.
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