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Trump celebrates as US adds 235,000 jobs in administration's first full month US interest rate rise certain after bumper jobs growth
(about 3 hours later)
The first full month of Donald Trump’s administration saw 235,000 new jobs created in the US, news for which the US president seemed quick to claim credit. The US Federal Reserve is poised to raise interest rates next week for only the third time since the financial crisis after the latest job numbers for the world’s largest economy beat expectations.
The economic trends underpinning a healthy February – the best month for job growth since July – clearly spring from the Obama era, but the president immediately retweeted conservative outlet the Drudge Report’s take on the figures: “GREAT AGAIN”. The strong figures make an interest-rate hike next week by the Federal Reserve all but certain. The closely watched Labor department data for February showed that the number of new jobs soared to 235,000, the best month for job growth since July last year, adding to pressure on the central bank to agree the first of three predicted rises this year.
Officials meet on Wednesday in the wake of strong employment, manufacturing and consumer data that should persuade the Fed to add further to its December rate rise, which saw the cost of borrowing raised by 0.25% to a range of between 0.5% and 0.75%.
President Donald Trump grabbed the chance to hail the strong jobs numbers, covering the first full month of his administration, as a personal victory, despite the momentum clearly springing from the legacy of his predecessor, Barack Obama.
Trump retweeted the assessment of conservative outlet the Drudge Report: “GREAT AGAIN”.
Earlier this week, Trump had welcomed high jobs estimates from the payroll processor ADP as being part of his project to “make America great again”.Earlier this week, Trump had welcomed high jobs estimates from the payroll processor ADP as being part of his project to “make America great again”.
“Great news. We are only just beginning. Together, we are going to #MAGA!” Trump tweeted on Wednesday, his optimistic tone a marked change from last month’s press conference in which the president claimed to have inherited “many problems across government and across the economy”.“Great news. We are only just beginning. Together, we are going to #MAGA!” Trump tweeted on Wednesday, his optimistic tone a marked change from last month’s press conference in which the president claimed to have inherited “many problems across government and across the economy”.
“To be honest, I inherited a mess. It’s a mess. At home and abroad, a mess,” Trump said then. The US economy is now in its 77th consecutive month of growth. Last month’s figures were also stronger than expected, with 227,000 jobs added in January. For December, the last full month of Obama’s term in office, the economy added 178,000 jobs. Higher interest rates are expected to push up the value of the dollar and suck in foreign funds to the US financial system. Surveys show firms are concerned that the high dollar will dent exports, and Trump has accused China and rival exporting nations of winning trade wars after artificially depressing their currencies.
Shortly after the Bureau of Labor Statistics released the jobs figures, the administration issued a press release celebrating the president’s 50th day in office and its role “jumpstarting job creation”. The US economy is now in its 77th consecutive month of growth. Last month’s figures were also stronger than expected, with 227,000 jobs added in January. For December, the last full month of Obama’s term in office, the economy added 178,000 jobs.
Trump bump or no, economists were impressed: the PNC financial services group chief economist Gus Faucher said approvingly that the “underlying trends for the economy now are similar to those in 2016”; John Cannally of LPL wrote on Twitter that the market “may begin to price in” the expected rate hikes this year.
“Today, the Fed cleared the last small obstacle on its way to a now virtually certain interest rate rise next week,” said Oliver Kolodseike, senior economist at the Centre for Economics and Business Research. The Federal Open Market Committee meeting takes place 14-15 March. Economists welcomed the figures, though many warned that wages growth of 2.8% failed to indicate that the economy was overheating.
Kathleen Brooks, research director at spreadbetting firm City Index, said: “While this jobs data is solid enough, it is not too hot to force the Fed to embark on more than three rate hikes this year, which is what the market expects.”
Gus Faucher, chief economist at financial services group PNC, said approvingly that the “underlying trends for the economy now are similar to those in 2016”, when there was consistently strong jobs growth. John Cannally of stockbroker LPL wrote on Twitter that the market “may begin to price in” the expected rate hikes this year.
“Today, the Fed cleared the last small obstacle on its way to a now virtually certain interest rate rise next week,” said Oliver Kolodseike, senior economist at consultancy the Centre for Economics and Business Research. The meeting of the Federal Open Market Committee, which sets interest rates, takes place 14-15 March.
Unemployment was down slightly in the new figures from 4.8% to 4.7%, and the number of people unemployed for longer than 27 weeks declined slightly. Black unemployment was nearly double white unemployment, 8.1% to 4.1%. The latter had decreased; the former had not.Unemployment was down slightly in the new figures from 4.8% to 4.7%, and the number of people unemployed for longer than 27 weeks declined slightly. Black unemployment was nearly double white unemployment, 8.1% to 4.1%. The latter had decreased; the former had not.
The preliminary analysis by ADP determined that the US economy had grown in key sectors and that many of the jobs added were in well-paid, desirable fields. Its estimated figures are usually high – this time they were more than 60,000 jobs north of the actual figures – but its breakdown of the statistics is widely respected and caused analysts who had predicted some slowdown to revise figures upward. The preliminary analysis by ADP celebrated by Trump earlier in the week found that the US economy had grown in key sectors and that many of the jobs added were in well-paid, desirable fields. Its estimated figures are usually high – this time they were more than 60,000 jobs north of the actual figures – but its breakdown of the statistics is widely respected and caused analysts who had predicted some slowdown to revise figures upward.
Trump’s supporters continue to watch for the president to make good on his promise to bring back US manufacturing jobs, which were up for the month: other drivers of growth were construction, private educational services, manufacturing, healthcare, and mining.Trump’s supporters continue to watch for the president to make good on his promise to bring back US manufacturing jobs, which were up for the month: other drivers of growth were construction, private educational services, manufacturing, healthcare, and mining.
Also among the less-praised drivers of economic growth is the Affordable Care Act, Obama’s signature healthcare legislation, which Trump and congressional Republicans aim to repeal, said Elise Gould of the Economic Policy Institute. There is “more voluntary part-time employment because people can now work part-time and get health insurance”, Gould told the Guardian, “and then you also see more people self-employed for the same reasons; they have some of the economic risk moved off of them.” Also among the less-praised drivers of economic growth is the Affordable Care Act, Obama’s signature healthcare legislation, which Trump and congressional Republicans aim to repeal, said Elise Gould of the Economic Policy Institute, a Washington-based thinktank. There is “more voluntary part-time employment because people can now work part-time and get health insurance”, Gould said, “and then you also see more people self-employed for the same reasons; they have some of the economic risk moved off of them.”
Still, there are several pockets of stagnation in the Trump economy, and those, too, are holdovers from the Obama era. “Public sector employment is still lower now than it was when the recession began,” Gould observed. “There was this pursuit of austerity, and that pursuit has put a chokehold on the speed of the recovery. If you look at one of the essential groups of workers in our economy, public school teachers, we have fewer than we did when the recession began. And we know for certain there are more kids.” Still, there are several pockets of stagnation in the Trump economy, and those, too, stem from the Obama era. “Public sector employment is still lower now than it was when the recession began,” Gould observed. “There was this pursuit of austerity, and that pursuit has put a chokehold on the speed of the recovery. If you look at one of the essential groups of workers in our economy, public school teachers, we have fewer than we did when the recession began. And we know for certain there are more kids.”