Non-farm payrolls added 235,000 jobs last month, according to this morning’s Employment Situation Summary from the Labor Department, beating economists’ expectations of 200,000 jobs added. Unemployment remained flat at 4.7 percent, while average hourly earnings increased by 6 cents to $26.09.
Of course, the real question is whether President Trump, in office for less than two months, can claim credit.
The most important thing about today's Report is not that more people got more jobs at higher wages, but which President deserves credit.
— Joe Weisenthal (@TheStalwart) March 10, 2017
Job growth has averaged more than 186,000 per month since January 2010, a recovery that predates Donald Trump’s presidency. While Trump’s victory last November sparked a stock market rally and jumps in consumer and business confidence, there has been no surge in either business or consumer spending.
Some analysts concur.
“Sentiment or optimism on the part of business and consumers has been lifted by the Trump victory, but that’s not quite the same as increased sales,” said Mark Hamrick, a senior market analyst at Bankrate.com, in a note quoted by Business Insider. “Businesses need to see a rise in demand before deciding to boost their employment.”
Future jobs reports will show whether this month’s gains were the effect of warm weather, market trends independent of politics, or consumer confidence inspired by Trump.
Where the Jobs Are
Goods-producing industries grew last month. Construction added 58,000 jobs, the biggest gains since March 2007, while manufacturing added 28,000 jobs. Mining added 8,000 jobs, for a total of 20,000 jobs added since the industry’s low in October 2016.
On the service-providing side, the following industries added jobs last month:
- Private educational services (+29,000 jobs)
- Healthcare (+27,000 jobs)
- Business and professional services (+37,000 jobs)
Retail trade shed 26,000 jobs in February, while other industries remained flat, including wholesale trade, transportation and warehousing, financial activities, information, leisure and hospitality, and government.
Wage Growth
“We’re getting closer and closer to full employment,” Ryan Sweet, an economist at Moody’s Analytics, told Bloomberg. “Wages had been the one sore spot in the labor market data, and I think that’s coming through here. With inflation accelerating I think we’re going to start to see even stronger wage growth down the road.”
Wages for employees on private payrolls increased by 6 cents an hour on average to $26.09, a 2.8 percent increase from last year. However, as Paul Vigna points out at The Wall Street Journal, that number isn’t the full story:
First off, that’s the overall number. Wages for nonsupervisory and production employees, a cohort that comprises 80% of the work force, saw their hourly and weekly average wages rise by 2.48% year over year. So, growth for this group is moving a slower than it is for the top guns.
On top of that, keep in mind these figures are not adjusted for inflation. Do you know what the most recent inflation rate was, as measured by the consumer price index?
2.5%.
Now, that was the January rate, and we’re talking about February jobs numbers. Also, CPI in January rose at its fastest rate in five years. We get the February numbers on Wednesday. Maybe they’ll be different, but by how much?
The PayScale Real Wage Index, which shows the buying power of U.S. workers’ salaries, shows that real wages have fallen 7.4 percent since 2006.
Tell Us What You Think
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