Wednesday, March 15, 2017

President Trump's first unemployment report shows 235,000 new jobs. Rate stable at 4.7%

The BLS released the first monthly employment situation report under President Donald Trump.  The report was surprisingly good.  The number of new jobs, Non Farm Payrolls, increased by 235,000 jobs which is well above the long-term averages. Unemployment rates across all major groups were flat or down. And there was a surprising bump (+58,000) in construction and manufacturing (+28,000) jobs. Healthcare and education added 62,000 spots. Retail Trade lost (-28,000) jobs ad information technology(no new jobs) was flat. Wages also increased by six cents which is also above average.


The February report showed a small decrease in the US unemployment rate to 4.7% while the Labor Force Participation rate remained flat at 63.0%. Average wages increased by 6 cents in February after a 5 cent increase in January. The number of unemployed stayed at about 7.5 million people.

Here is the chart of Non-farm Payrolls over time since the recession.

The national unemployment rate was 4.7%. After a steep decline during the recovery, the rate has flattened recently.  The Labor Force Participation rate continues to increase.


President Trump has been given a gift of a strong economy with few short-term issues. The economy is performing well enough for the Federal Reserve Bank to raise interest rates. The employment report, along with the stock market, are the two main economic indicators the average person pays attention to in the news.

The President may want to look at some of the following long-term issues that affect his his supporters and all of us. He could tackle slow wage growth and the shift to a service economy from a manufacturing economy. requiring high levels of education in the job market

Present Trump has attacked the BLS in the past

President Trump is also noted for a having criticized the accuracy of the BLS unemployment reports. He used misleading definitions of unemployment during the presidential campaign. Trump will almost certainly try to make cuts at BLS, US Census and EEO offices as he continues to 'wage war on the facts."

Black Unemployment

The Black unemployment rate rose to 8.1%.  The rate is volatile because of the small sample size and moves around a lot. But the overall trend has been decreasing. Black men older than 20 years have an unemployment rate of 7.85% while Black women have a rate of 7.12%.

White the Black Unemployment rate ticked up, the long term trend in participation look good since the end of 2013.  Black people are finally getting jobs as White leave the job market. It looks like more Blacks are returning to the job market so the unemployment rate is fixed while the participation rate increases.

The "Real" Black unemployment rate stayed at a relative high at 12.6% showing continued slack in the Black labor market.

The national U-6 rate show continued improvement dropping to 9.2%.  U-6 includes all unemployed, people working part time who want full time work, and marginally attached workers (basically everyone who is available to work and wants to work)

The Business Survey showed strong employment growth especially in private goods producing sectors.

Again, strong job growth was across many industries. The suprise category was consturction(+58K which may have been helped by warm weather in January and February.

There was a slight change in the Goods to Service New Job Ratio.  Goods producing jobs showed a large increase thanks to changes construction and manufacturing jobs. Approximately 16% of all new jobs are goods producing jobs. 


Other Notes

ADP reported 298,000 new jobs were created in February 2017.  The jobs were split among small businesses (+104,000), medium sized businesses (+122,000) and large businesses (+72,000).  ADP report a big jump in good producing jobs which increased by 106,000 including 66,000 in construction. Service business hired 193,000 people. including 66,000 in business services and 40,000 each in Ed/Health and Leisure/Hospitality, respectively. .

Paychex small business jobs index was up slightly (0.03%) to 100.78 in February for straight month of increases.

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