The Trump Economy Smashes Expectations
The economy continues to smash expectations with strong job creation, rising wages, and soaring confidence thanks to President Trump’s pro-growth agenda.
CNBC: Payrolls Smash Estimates with Gain of 250,000, Wage Gains Pass 3% for First Time Since Recession
“Job growth blew past expectations in October and year-over-year wage gains jumped past 3 percent for the first time since the Great Recession, the Labor Department reported Friday. Nonfarm payrolls powered up by 250,000 for the month, well ahead of Refinitiv estimates of 190,000. The unemployment rate stayed at 3.7 percent, the lowest since December 1969.”
REUTERS: US Weekly Jobless Claims Fall; Continuing Claims Lowest Since 1973
“New applications for U.S. unemployment aid fell last week and the number of Americans receiving benefits was the lowest in more than 45 years as labor market conditions tightened further. … Initial claims for state unemployment benefits dropped 2,000 to a seasonally adjusted 214,000 for the week ended Oct. 27, the Labor Department said. … Claims fell to 202,000 during the week ended Sept. 15, which was the lowest level since November 1969.”
CNBC: Wages and Salaries Jump by 3.1%, Highest Level in a Decade
“Wages and salaries rose 0.9 percent, well ahead of expectations for 0.5 percent. Benefit costs were up 0.4 percent. On a yearly basis, wages and salaries jumped 3.1 percent, the biggest increase in 10 years. … [T]he unemployment rate is now at 3.7 percent, the lowest since 1969, and wage pressures have begun to build.”
THE WALL STREET JOURNAL: U.S. Consumer Confidence Surged in October to 18-Year High
“The Conference Board on Tuesday said its index of U.S. consumer confidence rose to 137.9 in October, the highest level since September 2000. … ‘The Expectations Index posted another gain in October, suggesting that consumers do not foresee the economy losing steam anytime soon,’ she said. ‘Rather, they expect the strong pace of growth to carry over into early 2019.’”
CNBC: Medicaid Enrollment Declines for the First Time in More Than a Decade as Strong US Economy Boosts Income for Poor Americans
“The booming U.S. economy appears to be reducing dependence on federal health insurance for the poor. Medicaid enrollment fell for the first time since 2007, declining by about 0.6 percent in fiscal year 2018 … ‘States largely attribute the enrollment slowdown to a strengthening economy, resulting in fewer new low-income people qualifying for Medicaid,’ said Kaiser, a nonprofit group that focuses on health care and health policy.”
BUSINESS INSIDER: US Economy Grows at Fastest Back-to-Back Pace in 4 Years, Boosted by Solid Consumer Spending
“The US economy grew at a faster rate than expected in the July-September quarter, according to the Commerce Department’s advance report released Friday. Gross domestic product, the value of every good and service produced within the country, increased at an annualized rate of 3.5%; economists had forecast 3.3% growth, according to estimates compiled by Bloomberg. With that number, the US economy has its strongest back-to-back quarters of growth in four years.”
AMERICANS FOR TAX REFORM’S ABIGAIL MARONE IN WASHINGTON EXAMINER: Trump’s Tax Cuts Jolt Manufacturing Jobs
“Since President Trump signed the tax cuts, manufacturing has been booming. At least 100 manufacturers have built new facilities, purchased new equipment, hired new employees, and invested in current employees through bonuses and benefit increases. Each has cited tax cuts as the reason for their actions.”
U.S. Economy Creates 250,000 Jobs in October, Beating Expectations Again
New data released by the Bureau of Labor Statistics (BLS) shows that nonfarm payroll employment rose by 250,000 jobs in October, far exceeding expectations by 50,000 jobs. The United States economy continues its longest, consecutive streak of positive monthly job numbers, with employment growth averaging 213,000 jobs per month in 2018—larger than the monthly gains in both 2016 (195,000) and 2017 (182,000). Overall, the economy has added 4.5 million jobs since the election of President Trump in November 2016.
Wages are also rising. Nominal average hourly earnings rose by 3.1 percent over the past 12 months. This is the first time that the 12-month growth in nominal average hourly earnings exceeded 3 percent since April 2009. Nominal weekly earnings growth is an even stronger 3.4 percent over the past 12 months. Both hourly and weekly earnings are rising faster than inflation, which rose by 2.0 percent using the Personal Consumption Expenses (PCE)—the Federal Reserve’s preferred measure, because it is so broad—in the most recent data from September.
Employment gains were widespread, with all industries gaining jobs over the month (see figure below). The last time this occurred was over a year ago (June 2017). These increases were especially large in education and health services (44,000), leisure and hospitality (42,000), manufacturing (32,000), construction (30,000), and transportation and warehousing (25,000). Since the President was elected, construction and manufacturing have fared extremely well, adding 507,000 and 446,000 jobs, respectively.
A separate household survey released by BLS also shows a strong, healthy economy that is pulling workers off the sidelines. The unemployment rate remained unchanged at 3.7 percent in October—the lowest it has been in almost 50 years. The unemployment rate for Hispanics (4.4 percent) is the lowest it has been since the series began in 1973. The 3.0 percent unemployment rate for individuals with some college or an associate degree is the lowest it has been since July 2001. Recently, the unemployment rate for African Americans and those without a high school diploma also hit record lows.
As Americans become more confident about their job prospects, they are coming off the sidelines and looking for work. The prime-age (25-54) labor force participation rate—which is an important indicator because it is not driven by demographics, but rather by the strength of the job market—increased by 0.4 p.p. to 89.0 percent among men and by 0.6 p.p. to 75.8 percent among women. This is the highest labor force participation rate for prime age women since July 2009.
Even more importantly, these people coming off the sidelines are finding jobs. The prime-age employment-to-population ratio, which looks at the share of the civilian non-institutional population who are employed, increased this month by 0.3 p.p. among men to 86.2 percent, and by 0.5 p.p. among women to 73.4 percent. For prime-age women, this employment-to-population ratio is the highest it has been since July 2001.
Overall, the BLS Employment Situation report highlights the continued progress the economy has made under the Trump Administration. People are eager to enter or re-enter the labor force and the pace of hiring remains strong, while wages are growing, meaning more money in the pockets of hardworking Americans.