Our
45th President has had no trouble claiming the good employment news
reported for January and February of this year. In those jobs
reports, released on the first Friday of the month, we saw
unemployment rates of 4.8 and 4.7 percent. In both of those months,
more than 200,000 jobs were created. 45 crowed that this data showed
how successful his Presidency had been, even though he had barely
kept his seat in the Oval Office warm, and oven though he had done
nothing, from a policy perspective, to stake his claim on progress
that could only have come from the economic recovery engineered by
his predecessor, President Barack Obama.
Now,
we have the report from March, with an unemployment rate, at 4.5
percent, that is at its lowest level in a decade (since May 2007).
We also have a sluggish report on job creation – with just
98,000 new jobs, less than half as many jobs that were created in
each of the last two months. Is the 45th President going to claim
that his actions have caused a slowing in job creation? Since he was
so quick to claim credit when the numbers looked good, what will he
say now?
More
importantly, the low jobs creation number suggests that the economic
recovery we have been experiencing is far from solid. The March
number can be a mere hiccup – we did have weather challenges
last month that may have slowed some job creation, and may even have
been responsible for lower job growth in the retail sector. But it
might also suggest that the Fed should not be so quick to raise
interest rates. Despite relatively low unemployment rates, there is
room for much more job creation before employers will have to compete
for workers.
The
overall unemployment rate of 4.5 percent would be something to
celebrate if it were accompanied with more job creation. It might
also be something to celebrate if the Black unemployment rate were
not so high – at 8 percent it is more than twice the white rate
of 3.9 percent. Furthermore, when those marginally attached to the
labor market, discouraged workers, and those working part time
because they can’t find full time work, are included, the
overall unemployment rate is 8.9 percent. Using the same
methodology, this unemployment rate would be 15.8 percent for African
Americans.
To
be sure, these numbers are a vast improvement on the numbers we saw a
year ago, not to mention five years ago. But the impact of these low
numbers has bypassed many workers. Too many have still not seen
their pay levels increase (wage growth was around .02 percent last
month), and too many still fear layoffs or job reorganizations.
Equally
importantly, the approach this administration has taken to federal
employment and to health care have had chilling effects in the labor
market. As an example, while employment has been trending up in
health care, the health care sector added about 20,000 jobs a month,
compared to an average monthly gain of 32,000 jobs in 2016. The baby
boom isn’t getting any younger, and Americans sure aren’t
getting any healthier. It is plausible that, instead, announcements
about health care by this administration, and chicanery by this
Congress, may have slowed health care employment when it should be
rising.
Except
for “America First: A Budget Blueprint to Make America Great
Again”, and a whole lot of rhetoric, we have no specifics
around this Administration’s economic plan. We do know,
however, that freezing or reducing federal employment will have an
impact on unemployment rates, and that cutting key departments
(Health and Human Services, Labor, Interior) will have an impact on
the long-term employment situation. Those who work in the social
service areas (social workers, community service workers) are also
rightly apprehensive about how their work will be funded and who will
pay for it. This unemployment rate report may be as good as it gets
if Mr. Trump has his way.
President
Obama did his best to create a robust economic recovery. President
Trump says he inherited “a mess”. The January and
February unemployment numbers disprove that assertion. The March
report, however, shows that while 45 did not inherit a mess, he can
make one with his draconian budget cuts and other ill-advised
economic measure.
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