May 20, 2018

February was a blowout month for U.S. job creation, ADP says


C’mon, you say. Trump’s policies aren’t even really in place yet. They certainly haven’t had time to have any real effect on anyone’s economic activity. You can’t seriously be giving Trump credit for this. Can you?

Can you???

Hey. Hey. I just report numbers here, people. I just report the numbers.

Employment in the private sector surged by 298,000 for the month, with goods producers adding 106,000, ADP and Moody’s Analytics said. Construction jobs swelled by 66,000 and manufacturing added 32,000.

The total shattered market expectations of 190,000, according to economists surveyed by ADP. The blockbuster report also solidified market expectations for the Fed to hike interest rates next week. Probability for an increase jumped to 91 percent after the release, according to the CME.

The report encompassed the first full month under President Donald Trump, who has pledged to rebuild the nation’s aging infrastructure system.

“February proved to be an incredibly strong month for employment with increases we have not seen in years,” Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement.

In addition to the construction and manufacturing positions, mining and natural resources also contributed 8,000 to the total. Trump has promised to restore mining jobs as well.

The year is off to a sizzling start for job creation, according to the ADP counts. January added 261,000 positions, a number that was revised upward from the originally reported 246,000.

A few points here:

First, ADP may call it a “blowout,” and CNBC may call the number “blistering,” but you need 200,000 new jobs a month just to stay at replacement level with population growth. This is a good number. Blowout would be more like 400,000.

Second, one could argue that to the extent any president deserves the credit, it should go to Obama because the “blowout” (such that it is) started in January and he was still president for the first three weeks of the month.

I think what’s happened here is Trump-related, but you have to keep it in perspective. Trump has not yet fully implemented an economic agenda that’s improved the fundamentals of the economy such that we can give him credit for that. When the Trump’s policies have been in place for several years and we’re seeing consistent GDP growth of 3-to-4 percent, then we can credit his policies.

But after sluggish job growth throughout Obama’s entire presidency, is it really hard to see what happened during this limited period of time? Much of companies’ reluctance to hire during the Obama years owed to both the fact and the expectation that Obama was hostile to business and to profits, and that he would seek ways to punish business success via higher taxes, heavier regulation and legal thumbs on the scale in favor higher labor costs. It makes perfect sense to think that, at the start of a new year when you know Obama’s policies are about to go away, you would do some of the hiring you’ve wished you could do all along, but were reluctant to move on because of the hostility of the man in the White House.

I would be surprised if this pace of hiring continues unless and until Trump makes real moves to change the policies that created the problems in the first place. Two months’ of corporate executives breathing sighs of relief and satisfying pent-up labor demand is not surprising simply because they knew change was coming. Keeping it going will be the real heavy lift. But that’s what we elected him for, right?

Source: Canada Free Press