Donald Trump promised to create jobs for Americans if he became president. Well, he did (become president) but he hasn’t (created many jobs).
On Friday, we’ll see if the last three months of subpar job growth was an unfortunate aberration or if the Trump administration should start worrying.
As it stands after revisions, May’s employment increase was 138,000 jobs; April’s gain was 174,000, and March’s was just 50,000.
Put them all together and the three-month moving average is just 121,000 jobs. That’s far below the 150,000 jobs a month needed just to absorb people trying to enter the workforce for the first time.
The “experts” expect to see a modest addition of 170,000 June jobs when the monthly report comes out at 8:30 a.m. Friday. The unemployment rate is expected to stay put at 4.3 percent.
President Trump is already falling into the trap that everyone in the Oval Office before him has been caught in. He’s celebrating his administration’s job creation even though the numbers don’t support any kind of jubilation.
If the president were smart, he’d use the slow economic growth to push through his tax reform and health care legislation. Without reform, he should say, Americans are going to have to get used to slow job growth.
To be perfectly honest, monthly and quarterly economic numbers are really meaningless. Government economists will tell you that all economic data produced by Washington is meant to be viewed over longer periods of time.
Each month’s report contains lots of statistical noise — assumptions and revisions that will make the data jumpy. But when reviewed over a long period of time, the data is a whole lot more credible.
Unfortunately for the government economists, Wall Street and the media are impatient. So Friday’s number will generate an immediate reaction.
The June jobs report, like all others, will contain a lot of statistical noise.
One loud addition to the June number will be the guesstimate of the number of jobs created by newly “born” companies that the Labor Department surveys miss.
That model has been adding more than 200,000 jobs a month to the number that the Labor Department reports. June’s guesstimate will be half that amount, so the job market won’t be getting much help from any newbie companies.
The problem with seasonal adjustments is that they reverse. Positive adjustments now must be counteracted with negative adjustments later. In other words, what helped the jobs report in the spring will eventually hurt it.
We will soon know whether that hurt begins with Friday’s number.