President Donald Trump ended his first year in office with the economy gaining 148,000 new jobs in the month of December, according to a federal report Friday.
The economy has seen fairly steady employment growth throughout the last year with a few notable exceptions. The strengthening labor market continues a trend that started during the final years of the last administration. The Bureau of Labor Statistics found in its latest monthly jobs report that the economy added 148,000 new jobs. Job growth over the last year has typically been over 200,000 with a few exceptions.
“Total nonfarm payroll employment increased by 148,000 in December, and the unemployment rate was unchanged at 4.1 percent,” the report stated. “Employment gains occurred in health care, construction, and manufacturing.”
Trump and his administration have focused on economic and workforce issues throughout his time in office. His appeal to working-class voters was a likely reason he won the presidency to begin with. Congressional leaders and the president have looked toward regulatory reform and even managed to pass a tax reform law intended to boost job growth – though there has been a debate on how much it will help.
The positive labor market trends in recent years followed an usually slow economic recovery that persisted throughout the last decade. Former President Barack Obama oversaw the sluggish recovery throughout his presidency – with the economy and labor market finally managing to strengthen in his final years. There has been a debate over whether the current or former administration is responsible for the positive growth over the past year.
“In many ways, this is just a continuation of the relatively good labor market that we had over the past few years,” Alec Levenson, a labor expert at the University of Southern California, told InsideSources. “The main positive aspect is a low and falling unemployment rate. But the downside is there hasn’t been a lot of wage growth, which has been a problem for a long time.”
The sluggish recovery was the result of a severe economic downturn – now known as the Great Recession. The positive economic trends have sparked increased confidence in the economy over the past year. The unemployment rate has become one of the more positive labor market indicators at 4.1 percent – the lowest unemployment rate since 2000.
The economy still faces some lingering issues that have persisted since the recession. The slow growth of wages has become one of the most concerning. A low unemployment rate typically leads to increased wages because of the higher demand for available workers – but average wage growth has been slow despite the tighter labor market.
Average wages increased by nine cents and now sit at $26.63 for the month of December.
Alfredo Ortiz, president of the Job Creators Network, expects wages to start showing more substantial growth as the labor market continues to tighten and productivity increases.
“Productivity is really the true driver of wage growth,” Ortiz told InsideSources. “I think you’re going to see that start happening as well as a tightening of the labor market. So I think we’re going to have automatic, strong wage growth, and the tax cuts, I think, really added fuel to an already strong economy.”
The labor force participation rate has also become a point of concern with how many people are currently out of the labor market. The participation rate fell considerably since the economic downturn. It improved some in recent years but has since fallen a bit in recent months – sitting now at 62.7 percent.
The participation rate tracks the number of employed and those actively seeking work as a percentage of the total population. Even the large population of retirees and student adults can’t account for everyone who has fallen out of the labor market. The employment-to-population ratio for prime-age adults has shown a lot of improvement but still hasn’t reached its pre-recession levels.
The Job Creators Network has been highly supportive of recent efforts to roll back regulations and reform the tax code – launching media campaigns and connecting small business owners with lawmakers and the media. Ortiz notes lawmakers can also look to welfare reform and apprenticeships to further strengthen the workforce.
“When you look at the people on the sidelines, the big issue in pulling them back is our social welfare policies,” Ortiz said. “We need to make sure our social welfare programs are exactly that. They’re there for people who are disadvantaged for a particular reason and we’re not keeping people on the sidelines as an unintended consequence.” Ortiz adds that welfare should help those that truly need it while not disincentiving people from working.
President Trump has taken a particular interest in apprenticeship programs with his administration following suit. The Department of Labor, in recent months, launched a task force to explore ways to expand apprenticeship programs.
Economic indicators elsewhere have also shown very promising improvements. The Gross Domestic Product (GDP) increased at an annual rate of 3.2 percent in the third quarter of this year. The GDP tracks the total dollar value of all goods and services produced over a specific time period and is the primary measure for assessing economic growth. The stock market has also shown very promising gains.
Healthcare saw the most significant increase in new jobs at 31,000, followed by construction and manufacturing. The jobs report does not include farm workers, private household employees, or nonprofits.