Reporters used adjectives such as “torrid,” “solid,” “unexpected,” and “strong” to characterize March jobs growth of 263,000, as reported by ADP/Moody’s on Wednesday, which far exceeded professional economists’ estimates of 170,000 new jobs for the month.
Last month Mark Zandi was uncharacteristically buoyant when commenting on February’s jobs numbers: “February was a very good month for workers. Powering job growth were the construction, mining and manufacturing industries.… Near record high job openings and record low layoffs underpin the entire market.”
Today Zandi extended his comments as the jobs market continues its recovery: “Job growth is off to a strong start in 2017. The gains are broad-based but most notable in the goods-producing side of the economy, including construction, manufacturing and mining.”
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During the past eight years economists such as Zandi had much less to be excited about as jobs growth under the previous administration was spotty, uneven, and almost trendless. And even when jobs were created, most of them were in the services sector, characterized by temp jobs, low wages, and high turnover. That was especially evident in the lack of wage growth during the past eight years.
The recovery from those long years in the jobs wilderness has been astonishing, repeatedly catching professional observers off-guard as they continue to have their projections fall far short of the job market’s actual performance. In fact, the average outlook from those professionals polled by the Wall Street Journal for Friday’s report from the Bureau of Labor Statistics (BLS) at the Department of Labor remains restrained, at just 175,000. In light of the report from ADP/Moody’s, however, many of them are likely to adjust their expectations upward.
Specifically, the latest from ADP/Moody’s show that 82,000 jobs were created in the goods-producing sector, with more than half of them in the construction industry. There were 181,000 jobs created in the services sector, with the bulk of them in the “professional/business services” and “leisure/hospitality” categories.
The contrast with the economy’s performance in October, the month before the election of Donald Trump, is stark. That month the economy barely generated 50,000 new jobs, but the jobs market bounced back in November and the months following, adding a total of 1.2 million jobs since the election. This puts Trump ahead of schedule in keeping his promise to add 25 million new jobs over the next decade, a promise he iterated in this policy statement from the White House:
By standing side-by-side with America’s workers and businesses, the President’s policies will unleash economic growth, create 25 million new jobs, and help Make America Great Again.
CNN, hardly a fan of the new president, was forced to admit that although the economy under the previous administration generated some 11 million jobs, “almost all [of them] … came in the service sector.… When jobs came back under Obama, the pay did not rebound. Middle class incomes are still below where they were in the late 1990s.”
Average wages are now much more likely to rebound thanks to growth in the higher-paying and more permanent sectors of the economy.
However, Robert Shiller, the prize-winning Yale economist, tried to throw some cold water on Wednesday’s numbers by estimating that robots and advances in artificial intelligence are likely to remove six million jobs from the economy over the next 10 years. Said Schiller:
A.I. [artificial intelligence] is a deeply challenging thing. People who are growing up today don’t know if they’re preparing for the right career, and challenges associated with that could lead to secular stagnation.
Missing from Shiller’s estimate is what’s currently happening in the energy sector. As The New American continues to report, that industry’s turnaround is well underway, with crude oil production estimated to increase from 9 million barrels per day currently to nearly 10 million in less than 18 months. Rigs are coming back online as roughnecks are reentering the workforce to take increasingly higher paid positions, utilizing skills learned earlier before OPEC tried to put the industry out of business.
Also missing from Shiller’s dark outlook is the vast number of individuals who will be needed to support AI and the robotics revolution, as it continues to accelerate, helping make the American economy ever more robust and vibrant.
Trump wanted jobs. He promised jobs. After less than four months in office, he’s getting them.
An Ivy League graduate and former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at LightFromTheRight.com, primarily on economics and politics. He can be reached at [email protected].
