The February jobs report that the Bureau of Labor Statistics released Friday was strong: 235,000 jobs were added – higher than the 200,000 expected by economists.
It was the first official report of President Donald Trump’s tenure, since the survey week for January’s report was before Inauguration Day.
According to Gary Cohn, the head of Trump’s National Economic Council, there’s no reason to credit Trump for the strong report.
During an interview with CNBC, Cohn said the report was “right exactly where it needed to be,” but he also said that Trump’s team wasn’t the reason for the beat.
For one thing, Cohn said, the jobs that were promised by CEOs who have met with Trump haven’t been created yet.
“Look, there’s clearly a good February as part of the number. I’m not going to deny that,” Cohn said. “But on the other hand, when you look at what we’ve been doing here at the White House and all of the CEOs that we’ve brought in – whether it be Exxon or Sprint or Intel – they’ve promised enormous amounts of jobs and job creation in the United States. Those hirings have not been done yet. Those are future hirings.”
Thus the beat in the February report, according to Cohn, is on the back of the recovery from the past eight years under President Barack Obama.
“So we’re still living on the hirings from the normalized economic growth that’s built into the system here,” Cohn told CNBC. “So when you look at what’s ahead of us and what’s built into the system, we have a huge backlog of hiring that we already know about in the normal run rate of the economy, so we’re very excited about what’s ahead of us.”
Cohn is right in the sense that the February report is fairly on par with the economic trajectory of the past few years.
Politico’s Ben White noted that the 235,000 gain in February was roughly in line with the past two Februarys: 238,000 in 2015, and 237,000 in 2016.
Additionally, the weather could have made the report look even stronger than it would have otherwise. The month was the second-warmest February in the past 123 years in the US. As Paul Mortimer-Lee, chief economist at BNP Paribas, noted, construction jobs boomed by 58,000 in the month – nearly three times as many as the industry’s 12-month and 24-month averages.
Francois Gourio, a researcher at the Federal Reserve Bank of Chicago, used his model to estimate that between 30,000 and 70,000 jobs were added because of the warm weather. (Of note: Chicago went without snow in both January and February for the first time in 146 years.)
Wage growth as measured by average hourly earnings is still below 3% year-over-year, so while it improved to 2.8%, it remains below pre-crisis levels.
In the end, because Trump has not gotten significant legislation through Congress and is less than two months into his presidency, there probably isn’t much to discern from Friday’s report as it pertains to Trump’s effect on the economy.