The latest report by the Labor Department shows that there were 209,000 nonfarm jobs added last month. The June report was also updated from the 222,000 new jobs previously created to 231,000.
“Excellent Jobs Numbers just released – and I have only just begun. Many job stifling regulations continue to fall. Movement back to USA!” tweeted Trump last week.
The unemployment rate also decreased to 4.3%, which is a bit less than the 4.4 % in June.
The wages also made a slight increase of 2.5% from last year’s July. The wage growth has been less due to the the majority of the jobs being in lower wage sectors, like at restaurant and bars where 53,100 jobs were added.
Leisure and hospitality saw the most growth in July. Construction saw a 6,000 new job spike and manufacturers hired about 16,000 new employees.
“The July increase in manufacturing was the fastest since February, and the sector has now increased employment in seven of the past eight months,” said Chad Moutray, chief economist for the National Association of Manufacturers.
Last week, both Toyota Motor Corp. and Mazda Motor Corp. said they would be spending $1.6 billion to build a manufacturing plant, where the companies would hire 4,000 new employees.
Formerly, Toyota was going to set up the plant in Guanajuato, Mexico, but will only be manufacturing Tacoma pickups there.
“Toyota & Mazda to build a new $1.6B plant here in the U.S.A. and create 4K new American jobs. A great investment in American manufacturing!” tweeted Trump. “….and don’t forget that Foxconn will be spending up to 10 billion dollars on a top of the line plant/plants in Wisconsin.”
But this is just a small part of the Trump administration’s GDP growth plan.
“We have a growth rate — a GDP — which has been much higher than, as you know, anybody anticipated, except maybe us,” said Trump last week. “But it’s going to go up. It’s going to go higher, too.”
Economists are also optimistic after the recent Labor Department reports.
“It was pretty solid across the board,” said Michael Feroli, chief U.S. economist at JP Morgan. “It suggests there is really no slowing in the momentum of the labor market.”
However, average monthly job gains are at 184,000. This is pretty much on par with the 187,000 average monthly job gains in 2016.
“We’re looking at job growth that was pretty similar to what we were getting a year ago or two years ago. I just don’t think at a business cycle frequency these things respond to political developments,” said Feroli.
But the level of employment has reached the same impressive levels as November 2007.
“It does not mean there’s no slack in the economy, [or] that we’re at full employment. But it does mean the job losses from the Great Recession are behind us,” said Diane Whitmore Schanzenbach, one of the authors of a report published by Brookings Institution’s Hamilton Project.
Although the economic growth is certainly a good thing, it could lead to inflation.
“The economy’s strength has encouraged the Federal Reserve to continue to gradually raise interest rates to more normal levels, after years of keeping lending easy to stimulate the economy,” writes The Washington Post. “Yet wage growth remains somewhat tepid, a sign that the economy may have further to go before reaching the point where further expansion merely results in inflationary pressures. As the unemployment rate falls, business owners have to compete more to hire qualified workers, forcing them to raise wages and adding to inflation.”
The U.S. stock in the recent months has set records. The Blue-chip Dow Jones industrial average closing was above 22,000 for the first time history last week.
“The blue-chip gauge has notched 33 record closes in 2017. It is on its longest winning streak, at eight sessions, since the 12-session period ended Feb. 27,” writes Market Watch.
The technology sector has performed well on the stock market, while energy stocks are still seeing a slump.
“Energy is primarily the only thing that [kept] the S&P from being in positive territory,” said Michael Antonelli, equity sales trader at Robert W. Baird & Co.
Author’s note: It’s impossible to fix the sluggish economy in six months, but the consistent positive Labor Department reports and the state of the stock market are certainly a step in the right direction. Like Trump said, they are just getting started. With fewer regulations, other sectors should also see more growth.
Editor’s note: Optimism is a wonderful thing. Businesses are looking at the Trump agenda, seeing that he has kept his word, and investing in their businesses appropriately. During the Obama administration, it was the opposite. Businesses could not tell when the next tax or regulatory burden might appear. They were afraid to invest and the resulting GDP numbers were horribly low.