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| Should Trump Get Credit for Good Jobs Numbers? | Should Trump Get Credit for Good Jobs Numbers? |
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| The first monthly jobs report to reflect the state of the economy during the Trump presidency is quite good. There’s not much to dislike about the 235,000 jobs added in February, nor an unemployment rate that ticked down to 4.7 percent, nor an average hourly earnings rise of 0.2 percent. | The first monthly jobs report to reflect the state of the economy during the Trump presidency is quite good. There’s not much to dislike about the 235,000 jobs added in February, nor an unemployment rate that ticked down to 4.7 percent, nor an average hourly earnings rise of 0.2 percent. |
| And it comes on the heels of mostly good data across a range of indicators, including retail sales, industrial output and the number of people filing for jobless benefits. | And it comes on the heels of mostly good data across a range of indicators, including retail sales, industrial output and the number of people filing for jobless benefits. |
| But it’s not enough to enjoy some decent economic numbers. Invariably these things become politicized. The Drudge Report splashed “GREAT AGAIN: +235,000” on its landing page within seconds of the Labor Department release. President Trump retweeted, one presumes gleefully, a tweet making the same point. | But it’s not enough to enjoy some decent economic numbers. Invariably these things become politicized. The Drudge Report splashed “GREAT AGAIN: +235,000” on its landing page within seconds of the Labor Department release. President Trump retweeted, one presumes gleefully, a tweet making the same point. |
| So how much of the economic gains evident in the data does the Trump administration actually deserve credit for? The answer is more ambiguous than you might think — and boils down to your philosophy of how the economy works. | So how much of the economic gains evident in the data does the Trump administration actually deserve credit for? The answer is more ambiguous than you might think — and boils down to your philosophy of how the economy works. |
| There is a straightforward case for President Trump’s having virtually nothing to do with the most recent economic statistics. While the newest jobs numbers reflect conditions from mid-February, roughly three weeks into the Trump presidency, at that point he had not yet taken concrete actions that would have a direct impact on the economy. | |
| No changes to the tax code or federal spending had been enacted at that point. Even the executive orders that have had economic implications have been more about direction than concrete actions, such as an order to find and eliminate regulations that may be outmoded. | No changes to the tax code or federal spending had been enacted at that point. Even the executive orders that have had economic implications have been more about direction than concrete actions, such as an order to find and eliminate regulations that may be outmoded. |
| President Trump has snagged good headlines out of things like negotiating for Carrier to keep some jobs in the United States, but those deals are trivial in the scheme of a nation with 146 million jobs. | President Trump has snagged good headlines out of things like negotiating for Carrier to keep some jobs in the United States, but those deals are trivial in the scheme of a nation with 146 million jobs. |
| Even when changes to fiscal and regulatory policies are enacted, it takes time for those changes to wend their way through the economy. Consider one example that has been a Trump hobby horse. If you believe, as the president does, that the Dodd-Frank Act regulating the financial sector has held back growth, consider all the steps that need to happen to change that. | Even when changes to fiscal and regulatory policies are enacted, it takes time for those changes to wend their way through the economy. Consider one example that has been a Trump hobby horse. If you believe, as the president does, that the Dodd-Frank Act regulating the financial sector has held back growth, consider all the steps that need to happen to change that. |
| You have to devise and pass legislation to undo the law, and appoint new regulators with a more hands-off stance. They then have to put the revised regulations through an elaborate comment process, which then might free banks to make more business loans, which in turn might lead businesses to hire and invest more. | You have to devise and pass legislation to undo the law, and appoint new regulators with a more hands-off stance. They then have to put the revised regulations through an elaborate comment process, which then might free banks to make more business loans, which in turn might lead businesses to hire and invest more. |
| It is a matter of years before an intended policy shift might affect the jobs numbers for good or ill, not weeks. | It is a matter of years before an intended policy shift might affect the jobs numbers for good or ill, not weeks. |
| And it’s worth a reminder that the recent numbers are entirely consistent with the economy’s growth pattern for years. The 235,000 extra jobs that have Drudge and Mr. Trump so enthused are actually fewer than those in four of the 12 months of 2016. The unemployment rate has hovered between 4.6 percent and 5 percent for 18 consecutive months, since September 2015. | And it’s worth a reminder that the recent numbers are entirely consistent with the economy’s growth pattern for years. The 235,000 extra jobs that have Drudge and Mr. Trump so enthused are actually fewer than those in four of the 12 months of 2016. The unemployment rate has hovered between 4.6 percent and 5 percent for 18 consecutive months, since September 2015. |
| So if you look only at the direct ways the president affects the economy, there is not much of a case for giving President Trump the credit. | So if you look only at the direct ways the president affects the economy, there is not much of a case for giving President Trump the credit. |
| At the same time, we can’t completely rule out some positive Trump effects on the economy, even as his policies have yet to take hold. | At the same time, we can’t completely rule out some positive Trump effects on the economy, even as his policies have yet to take hold. |
| The corporate chiefs who decide whether to hire and invest are forward-looking, and the prospect of lower taxes and lighter regulation may indeed be making them more eager to deploy cash. “It seems like he’s woken up the animal spirits,” said Jamie Dimon, the chief executive of JPMorgan Chase, in an interview on Bloomberg Television recently. | The corporate chiefs who decide whether to hire and invest are forward-looking, and the prospect of lower taxes and lighter regulation may indeed be making them more eager to deploy cash. “It seems like he’s woken up the animal spirits,” said Jamie Dimon, the chief executive of JPMorgan Chase, in an interview on Bloomberg Television recently. |
| That observation is backed by both the buoyant stock market, which seems to be pricing in higher corporate earnings in the years ahead, and surveys of both consumers and C.E.O.s. | That observation is backed by both the buoyant stock market, which seems to be pricing in higher corporate earnings in the years ahead, and surveys of both consumers and C.E.O.s. |
| There’s not a lot of solid evidence that general confidence is a major driver of economic results; surveys of consumer sentiment and executives’ confidence tend to reflect current economic conditions rather than offer some good predictive information. | There’s not a lot of solid evidence that general confidence is a major driver of economic results; surveys of consumer sentiment and executives’ confidence tend to reflect current economic conditions rather than offer some good predictive information. |
| But it’s hard to prove that this confidence doesn’t matter either. It’s entirely plausible that Mr. Trump’s election in November and the ensuing market rally made business leaders a bit more inclined to move forward with hiring plans in January and February. | But it’s hard to prove that this confidence doesn’t matter either. It’s entirely plausible that Mr. Trump’s election in November and the ensuing market rally made business leaders a bit more inclined to move forward with hiring plans in January and February. |
| Gary Cohn, director of the White House National Economic Council, essentially conceded in a television interview Friday that warm February weather and the long-term trajectory of the economy were factors in the latest jobs numbers, while promising that bigger job gains were down the road, owing to the White House’s embrace of C.E.O.s. | Gary Cohn, director of the White House National Economic Council, essentially conceded in a television interview Friday that warm February weather and the long-term trajectory of the economy were factors in the latest jobs numbers, while promising that bigger job gains were down the road, owing to the White House’s embrace of C.E.O.s. |
| “Clearly a good February is part of the number,” he said on CNBC. “When you look at what’s ahead of us, what’s built into the system, we have a huge backlog of hiring that we already know about. We’re very excited about what’s ahead of us.” | “Clearly a good February is part of the number,” he said on CNBC. “When you look at what’s ahead of us, what’s built into the system, we have a huge backlog of hiring that we already know about. We’re very excited about what’s ahead of us.” |
| So does Mr. Trump deserve any credit for solid economic results? If you think the economy is driven by concrete, specific policies around taxes, spending, monetary policy and regulation, the answer is no. If you think that what really matters is the mood in the executive suite, then just maybe. | So does Mr. Trump deserve any credit for solid economic results? If you think the economy is driven by concrete, specific policies around taxes, spending, monetary policy and regulation, the answer is no. If you think that what really matters is the mood in the executive suite, then just maybe. |