The U.S. economy added 228,000 new jobs in November, substantially besting the 195,000 increase in jobs that economists predicted. The unemployment rate stayed at 4.1 percent, the lowest rate in seventeen years. Although this figure is unchanged, the labor force participation rate continues to increase, along with the size of the labor force generally, indicating that the economy is more than strong enough to keep up with the growth.
The manufacturing sector was a particular highlight, according to the Bureau of Labor Statistics. That sector of the economy added 31,000, while its unemployment rate fell to a record-low of 2.6 percent. Since a recent low in November of 2016, manufacturing employment has increased by 189,000.
“We’re especially pleased to see the manufacturing sector roaring back to life, adding a total of 159,000 jobs since President Trump took office after averaging a loss of more than 1,000 jobs per month during the last year of the previous administration,” White House press secretary Sarah Sanders said following the report.
Overall, the report demonstrated that the economy has rebounded strongly after deadly hurricanes slammed into Texas and Florida, which dramatically impacted hiring. And it highlights a strong economic trend in 2017 that should carry over into 2018 given the pro-growth reforms currently underway by Republicans. Already, the median jobs growth of 208,000 per month is the strongest showing by a president since Bill Clinton was in the White House.
Nevertheless, some pundits are already looking for a way to spin an uncontrovertibly positive job report against the president. Take, for instance, this analysis from Reuters:
U.S. job growth increased at a strong clip in November, painting a portrait of a healthy economy that analysts say does not require the kind of fiscal stimulus that President Donald Trump is proposing, even though wage gains remain moderate. …
The fairly upbeat report underscored the economy’s strength and could fuel criticism of efforts by Trump and his fellow Republicans in the U.S. Congress to slash the corporate income tax rate to 20 percent from 35 percent.
“The labor market is in great shape. Tax cuts should be used when the economy needs tax cuts and it doesn’t need tax cuts right now,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “When politics and economics are mixed in the stew, the policies that are created often have a very awful smell.”
Huh? There is absolutely a wrong time for “fiscal stimulus,” especially of the kind conducted by the Obama Administration. The willy-nilly use of taxpayer dollars to fund projects that at best were not anywhere close to “shovel ready” and at worst were an absolute waste of cash didn’t just fail to grow the economy, it pushed our national debt toward untenable levels.
But there is no wrong time for tax reform. Unlike government stimulus, in which a group of overconfident bureaucrats and politicians believe they know which projects will lead to economic growth, tax reform keeps more money in the pockets of every business. There’s no favoritism or politicking. Just a wholesale reduction in tax rates so that businesses can invest in things that make them more productive and reduce prices to be more competitive.
Although the economy is no doubt in a much better place than it was one year ago, nobody should be under the illusion that things are as good as they could or should be.
Wages, for instance, ticked up by 5 cents, to $26.55, a 2.5 percent increase over the year, which is relatively sluggish given the sizable job gains that are occurring. That signals that there is still economic slack that needs to be made up in order to create more wage competition for skilled workers.
The Republican tax reform plan will jumpstart not only wages, but productivity, by allowing businesses to invest more in workers, infrastructure and capital. This is turn can foster faster economic growth, thereby creating more wealth and improving the standard of living for younger generations. At one time the idea that children would be better off than their parents wasn’t hoped for, it was assumed as part of the American Dream. The idea that Republicans should only pursue the resurrection of that dream when the labor market isn’t in great shape is an idea with a “very awful smell.” One that reeks of putting partisan interests over those of Americans struggling in today’s economy.