At 8:30 AM EST today, the Department of Labor reported Jobs Growth of 235,000 last month, and an Unemployment Rate of 4.7%, down from 4.8%. During President Obama’s second term, Trump dismissed the favorable employment statistics as being phony. But now that they reflect upon him–and they’re good–he chooses to boast about them. Will he still like them when they are negative? Time will tell!
Jan Hatzius, Chief Economist at Goldman Sachs, told CNBC-TV: “We’ve seen almost 100,000 jobs added in the construction sector in the last two months, and the warm winter, I think, had something to do with that.” I’ve been writing this blog for several years, and one month doesn’t indicate either an economic boom or a bust. Also, as Mr. Hatzius suggested, statistics can arrive earlier, by a month or two, or they can also be delayed.
Today’s employment statistics can, however, make life easier for Fed Chairman Janet Yellen, as the next Federal Open Market Committee’s (the central bank’s monetary policy-making arm) meeting is scheduled for next Tuesday and Wednesday. Ms. Yellen has already signaled an almost definite rate hike. Donald Trump, on the other hand, has been trying to exert his influence, to maintain low interest rates in order to help job growth. But, maintaining low rates in the face of strong employment, can have adverse economic effects.
The Fed has a so-called “Dual-Mandate”—to balance price stability with maximum sustainable employment. In doing so, it strives to balance those two goals. If the Fed were to keep interest rates too low, in order to enhance job growth, inflation could get out of hand. Conversely, raising rates to rein-in excessive inflation; however, would hurt job creation.
But, as Sean Spicer, Donald Trump’s Press Secretary summed up his boss’s interpretation of today’s DOL Jobs Report: ”I talked to the president prior to this [briefing], and he said to quote him for this, ‘[The jobs reports] may have been phony in the past, but it’s very real now.’” But, how will Mr. Wonderful spin the first negative Jobs Report, issued by his Secretary of Labor, and who will Trump blame for it?