The Bureau of Labor Statistics (BLS) on Friday released the February 2017 jobs report, revealing that job creators are optimistic about potential economic growth under a new president. In President Donald Trump’s first full month in office, 235,000 American workers started new jobs, outperforming labor experts’ expectations of 190,000 positions filled.
Further, workers’ wages skyrocketed last month with employers reporting hourly pay increases of 2.8 percent over the same period last year. Both the Dow Jones Industrial Average and NASDAQ responded positively to the news, and market watchers anticipated a strong day on Wall Street.
While it’s certainly too early to predict how President Trump’s plans will affect the markets once enacted, the jobs report gives us an idea of expectations from those who drive our economy. After eight years of lopsided wage growth and tepid economic productivity, employers might finally have cause to save, spend and invest — to create new products, to hire new people and to prepare for a fruitful future.
the jobs report gives us an idea of expectations from those who drive our economy
Though he was touted as the savior of American job creation, President Barack Obama’s average monthly job growth was just 109,000 throughout his eight years in office. The labor participation rate, a BLS measure of able-bodied Americans currently employed or actively seeking work, plummeted to a historic low of just 62.4 percent. By the end of his time in the White House, 95.1 million capable adults had abandoned the job market altogether.
Democrats often explain away such economic stagnation by insisting President Obama inherited a post-crash job market, and thus, any growth was an extraordinary achievement. In fact, liberal commentators and media eagerly lauded him as a “good jobs president,” defensive about any accusation that the Democratic president’s new taxes, regulations and government debt prohibited a robust recovery.
However, it is important to remember that historically, presidents taking office during wounded economies benefit from equal or greater rebounds. President Ronald Reagan, for example, oversaw an average monthly job creation rate of 166,000 and a total of 18.1 million added throughout his eight years in the White House, despite a recession occurring during his first two years in office that many economists believe was actually worse than the circumstances Obama inherited.
Throughout his two terms, Obama presided over an economy that added just 11.3 million new positions. The Reagan-Obama variance is especially astonishing when considering that the United States was home to 90 million more people when Obama took office compared to the first year of Reagan’s term, which made for a much larger economy.
Throughout his two terms, Obama presided over an economy that added just 11.3 million new positions.
According to Martin Regalia, former chief economist at the U.S. Chamber of Commerce, the Obama recovery was, in fact, so abysmal that it defied historic norms on economic rebounds following recessive periods. While Obama was in office, growth in gross domestic product (GDP) averaged 1 percent, “the slowest of any expansion in a post-war era” and “less than half the rate of growth of any expansion” except one following the 1974 recession, which averaged 1.7 percent. Time after time, potential GDP estimations from economists during the Obama era vastly overshot reality, leaving investors and employers pessimistic about their economic forecasts.
In the Trump era, however, business owners remain optimistic about the country’s economic potential. According to a recent Zogby poll of corporate executives with 100 or more employees, 48 percent of employers think the next four years will be “excellent” or “good” for the U.S. economy, compared to just 23 percent who believe it will be “poor.”
If President Trump wants to see such strong jobs reports and polling numbers grading his performance, he should resist any temptation to impose anti-trade measures that would destroy American jobs and investment opportunities. He should immediately implement sweeping tax and regulatory reform, and he should defy the Obama Administration affinity for using government spending as stimulus. And, he should quickly implement patient-centered health care reforms that repeal taxes and mandates that compromise access to quality medical care and inflict cost and compliance burdens upon job creators (and, thus, threaten job creation).
If President Trump wants to see such strong jobs reports and polling numbers grading his performance, he should resist any temptation to impose anti-trade measures that would destroy American jobs and investment opportunities.
Further, he should address the compounding drivers to our national debt. The nation’s fiscal health is integral to its economic success, and reforming our biggest spending programs — Medicare, Medicaid and Social Security — is crucial to U.S. financial solvency. This means swallowing a healthy dose of reality, as well as having the political courage to make tough choices.
Finally, he should examine the conditions that have created chronic underemployment and, for tens of millions of Americans, a total abandonment of the labor market. Better job training, vocational education and reversing social decay are critical to getting these Americans back into long-term, stable jobs. Trump spoke passionately to these voters in 2016, and he has an obligation to fulfill his promise to make them a part of a rebounding economy.
While the president doesn’t “create” jobs (despite claims to the contrary by media congratulating Obama on his exaggerated accomplishments on this front), he can foster the conditions for them to be created. He can also destroy jobs or slow the growth of their creation through legislation and regulation that ignore economic realities.
Job creators and voters are optimistic about what President Trump can do for America’s economy, and thus, their personal financial security. As his first jobs report shows, American businesses have put their faith in his promises. Now, he must deliver.
Ellen Carmichael is a senior writer for Opportunity Lives. Follow her on Twitter @ellencarmichael.