by Robert Carbery
Hiring increased in April, encouraging signs that the economy is rebounding after a slogging first quarter. Strong gains in business services and healthcare have helped the economy expand into the Spring months of 2017.
Will there be more or similar growth to come in May and June? With unemployment this low some are suggesting that wage increases could continue as competition increases for a smaller and smaller labor force. This April jobs report will likely lead to the Federal Reserve raising interest rates again when they meet in June. Still, many forget that the unemployment rate is not a true number of the actual unemployed or a signal of the health of the job market or economy as it does not include those who have dropped out of the workforce entirely.
The Labor Department reported 211,000 added jobs in April after just 79,000 added in March. This pickup seems to prove many economists’ claims that the Q1 slow start was just that, a slow start, a blip on the radar. Many foresee 3% or more growth in Q2 and maybe more into the later quarters of the Trump administration for those who are more bullish.
President Trump tweeted after the jobs announcement: “JOBS, JOBS, JOBS!”
The president will need to help enact more than just encouragement via Twitter during these slowing and somewhat uncertain economic times. We have not been able to sustain anywhere near 3% growth over recent years while we are finally recovering from the latest subprime mortgage backed securities crisis and subsequent recession.
FOX BUSINESS: US ECONOMY ADDED 211K JOBS IN APRIL
The early months of the Trump administration have seen surging consumer confidence but little in actual results in revenue through the end of March. This past April has proven more hopeful with a spike in job growth, but it must be sustainable.
The American economy today is changing and also dynamic. Retailers are shuttering, sure, but Amazon is growing at amazing rates and disrupting the overall economy — hiring like crazy, by the way. If further acts of deregulation and business friendly actions are taken by the Republican-held Congress and Trump administration, further growth can become more of a sure thing in the coming years despite the calls of a coming recession in the next year or two.
Labor force participation ticked down to 62.9% in April, which has been barely changed over the last four years — a rate that remains narrowly above a four-decade low. The evidence is still coming out as to whether this “tight” employment market is resulting in an upward pressure on incomes and/or inflation. Average hourly wages increased 2.5% in April for private sector workers compared with the year before.
“The labor market is very tight and increases the chance of an acceleration in wage inflation in the near term,” said Mickey Levy, an economist at Berenberg Capital Markets. Let’s hope for all of us employed workers and families out there, that an increase in wages is coming. It would be great for the increase to hit all income sectors, but let’s just start with sustainable and increasing wages where we can get them for now.
Retail jobs increased after two months of declines in a much needed boost to this shifting industry. April hiring was strong in the leisure and hospitality sector as well, hinting that the economy is still chugging more than along if there is still growth in the hotels and resorts across the country.
Jobs are being emphasized by our current president. Let’s follow his strategy and give him the tools he needs to allow businesses to grow and put more money into the pockets of its employees.
That’s how we Make America Great Again.
by Robert Carbery