A Trump Jobs Slump?
When non-farm payroll employment rose by 235,000 in February, some speculated it was a Trump Bump. Now that the numbers for March are in, and aren’t so good, should we call it a Trump Slump?
Nonfarm payrolls rose just 98,000 in March, significantly weaker than the 180,000 jobs expected by economists, and the slowest monthly gain since May 2016. To add insult to injury, January and February payrolls were revised down, making the overall change in payrolls just 60,000.
But the manufacturing sector was a different story. There, jobs increased for the fourth straight month, an unusual occurrence of late.
“The March employment report was a mixed bag, to say the least,” said Lindsey Piegza, chief economist at Stiffel Economics. “Looking past the headline rise in payrolls, the weakest monthly gain in ten months, the jobless rate unexpectedly fell to the lowest level in nearly a decade.”
Wage growth, one of the key factors of labor market strength from the perspective of the Federal Reserve, slipped to 2.7 percent. That, according to Piegza, suggests “waning support to earnings as we head into the second-quarter of the year.”
The civilian labor force rose by 145,000 in March, the fourth consecutive month of improvement. The participation rate was unchanged at 63.0 percent a near four-decade low, yet the unemployment rate declined from 4.7 percent to 4.5 percent in March, the lowest since May 2007.
“The unemployment rate has been hovering near the Fed’s lower bound of full-employment since October 2014,” noted Piegza.
National Association of Manufacturers (NAM) President and CEO Jay Timmons noted that the jobs numbers “continue the four-month trend of increasing job growth, which manufacturers have not seen in some time.”
“President Trump’s actions have certainly boosted manufacturers’ confidence in the future,” he added, “The president is rethinking red tape and addressing our regulatory burden, helping us to create American jobs and grow our economy.”
An outdated tax code, crumbling infrastructure, and excessive regulations are hobbling the ability of US manufacturers to win against overseas competitors, according to Timmons.
“Manufacturers expect to see action on bold solutions for regulatory reform, infrastructure investment, and tax reform, among other issues,” he said.