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The Trump Economy: Jobs, Jobs, Jobs

- March 9, 2018

With Job Growth & Tax Cuts, Americans Are Loving The Trump Economy

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TOP TAKEAWAYS

  • With unemployment remaining low at 4.1 percent, the number of Americans filing for unemployment fell to a near 45-year low in February, and the labor market beat expectations by adding 313,000 jobs.
  • This month's job report was so strong that MSNBC's Joe Scarborough praised the economy saying "this was a month of good news, really good news"
  • Small business confidence is at a record high and small businesses owners "are more than just optimistic, they are ready to grow their business."
  • Consumer confidence rose to its highest point in more than a decade as public opinion shifts in favor of President Trump's economic policies.
  • As the effects of the Tax Cuts and Jobs Act have started to be felt, Americans saw the largest increase in disposable income in years; the "crumbs" multimillionaire Nancy Pelosi mocked added up to $30 billion in January alone.

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TODAY'S STRONG JOBS REPORT SHOWS LABOR MARKETS AND WAGES CONTINUED TO GROW IN FEBRUARY

In February, The Unemployment Rate Remained At 4.1 Percent

Nonfarm Payroll Increased By 313,000 In February. ( Bureau Of Labor Statistics , Accessed 3/9/18)

  • Economists Had Expected Payroll To Increase By 200,000. "Economists surveyed by Reuters had been expecting nonfarm payroll growth of 200,000 and the unemployment rate to decline one-tenth of a percent to 4 percent." (Jeff Cox, "Nonfarm Payrolls Increase By 313,000 In February Vs. 200,000 Est.," CNBC , 3/9/18)

The Unemployment Rate Stayed The Same At 4.1 Percent In February. ( Bureau Of Labor Statistics , Accessed 3/9/18)

The Number Of Americans Filing For Unemployment Fell To "A Near 45-Year Low Last Week." "The number of Americans filing for unemployment benefits fell to a near 45-year low last week, pointing to strong job growth in February and solid momentum in the economy." (Lucia Mutikania, "U.S. Jobless Claims Near 45-Year Low As Economic Outlook Brightens," Reuters , 2/22/18)

Job Growth Continued In February, As Nonfarm Employment Increased By 313,000 Jobs, Bringing The Total Jobs Created Under President Trump To 2,481,000 Million. ( Bureau Of Labor Statistics , Accessed 3/9/18)

Wages Continued To Go Up In February

Nominal Income Rose Above Expectation And Wages And Salaries Increased 0.5 Percent After A 0.4 Percent Gain In January. "Overall, nominal incomes rose 0.4 percent, more than the 0.3 percent median estimate of economists. Wages and salaries increased 0.5 percent after a 0.4 percent gain in the prior month." (Sho Chandra, "Real Disposable Incomes In U.S. Increase Most Since 2015," Bloomberg , 3/1/18)

  • In January, Wages Rose At Their Fastest Rate Since 2009. " U.S. hiring picked up in January and wages rose at the fastest annual pace since the recession ended, as the economy's steady move toward full employment extended into 2018." (Sho Chandra, "U.S. Added 200,000 Jobs In January; Wages Rise Most Since 2009," Bloomberg , 2/2/18)
  • The January Jobs Report "Shows Wage Growth Is Finally Picking Up." "Friday's jobs report shows wage growth is finally picking up. Average hourly earnings rose 2.9% in January from a year earlier, the strongest gain since 2009." (Wall Street Journal Money Beat, Twitter Feed, 2/2/18)

Americans Found Themselves With More Money In Their Pockets This February, As Disposable Income Posted The Biggest Gain In Three Years

Real Disposable Income Experienced The Biggest Gain Since April 2015. "Real disposable income, or earnings adjusted for taxes and inflation, advanced 0.6 percent from the prior month, the biggest gain since April 2015, according to a Commerce Department report Thursday. Nominal consumer spending grew 0.2 percent, matching the median forecast in a Bloomberg survey and following a 0.4 percent gain. The Federal Reserve's preferred price gauge, excluding food and energy, had the biggest monthly increase in a year." (Sho Chandra, "Real Disposable Incomes In U.S. Increase Most Since 2015," Bloomberg , 3/1/18)

Market Watch: "Crumbs? Bonuses Tied To Trump Tax Cuts Said To Boost U.S. Incomes By $30 Billion." (Jeffry Bartash, "Crumbs? Bonuses Tied To Trump Tax Cuts Said To Boost U.S. Incomes By $30 Billion," Market Watch , 3/3/18)

  • The "Crumbs" That House Minority Leader Nancy Pelosi (D-CA) Claimed That Ordinary Americans Would Receive From The Tax Cuts And Jobs Act In January Amounted To $30 Billion. "Democratic leader Nancy Pelosi said ordinary Americans would only get "crumbs" from the Trump cuts. The federal agency that does the math says those crumbs amounted to as much as $30 billion in January." (Jeffry Bartash, "Crumbs? Bonuses Tied To Trump Tax Cuts Said To Boost U.S. Incomes By $30 Billion," Market Watch , 3/3/18)

"Americans' Wallets Fattened In January On Recent Tax Cuts." "Americans' wallets fattened in January on recent tax cuts, indicating increased spending power may boost the economy this quarter." (Sho Chandra, "Real Disposable Incomes In U.S. Increase Most Since 2015," Bloomberg , 3/1/18)

  • The Tax Reduction Helped Boost The Savings Rate To 3.2 Percent. "The reduction in taxes helped boost the saving rate to 3.2 percent, the highest since August, from 2.5 percent in December, which was the lowest since 2007." (Sho Chandra, "Real Disposable Incomes In U.S. Increase Most Since 2015," Bloomberg , 3/1/18)

The Data Examining The First Month Since The Passage Of The Tax Cuts And Jobs Act "Reflected A $30 Billion Increase In One-Time Bonuses And A $115.5 Billion Annualized Drop In Personal Taxes." "The data, covering the first month since the tax law was signed in December, reflected a $30 billion increase in one-time bonuses and a $115.5 billion annualized drop in personal taxes, the Commerce Department said. Such boosts to Americans' wallets, along with a tight labor market, will sustain spending. Those items, plus rising prices, are likely to keep Fed policy makers on track for at least three interest-rate increases this year, including one that's widely expected later in March." (Sho Chandra, "Real Disposable Incomes In U.S. Increase Most Since 2015," Bloomberg , 3/1/18)

THIS MONTH'S JOBS REPORT HAS DRAWN WIDESPREAD PRAISE ACROSS THE POLITICAL SPECTRUM

This Month's Jobs Numbers Are "Blockbuster"

CNBC On February Jobs Report: "Awesome," "Blockbuster," "Great." ANCHOR: "Lets get to Hampton, Hampton Pearson is going to help us this morning with these numbers which are due right about now, Hampton the numbers please." HAMILTON HAMPTON: "313,000, non-farm payrolls increased in February by 313,000 jobs. The unemployment rate is 4.1%. Average hourly earnings, 0.1%. 2.6% year over year. We also had significant upward revisions for December and January. A total of an additional 54,000 jobs more than had been previously reported. Private sector in January added 287,000 jobs, the average work week increased. It's now it's 34.5 hours, up .1. Job growth by sector blockbuster numbers. Construction up 61,000, retail plus 50,000, professional and business service 50,000, manufacturing up 31,000. Job losses only in the information sector losing 12,000 jobs. The labor reports participation rate is now at 63%. That's up .3% from the previous month. U-6, 8.2% no change from the previous month we had an 806,000 increase in the size of the labor force. That's the biggest monthly jump since June of 1983 finally, black unemployment down to 6.9% an .8 decrease from the previous month. So blockbuster headline numbers but still not significant moves on wages during the month of February back to you." JOE KERNEN: "Yeah a lot to think about, Hampton. Let's get to our panel thanks, Hampton. Let's get to our panel for reaction Anastasia Amoroso of JP Morgan Private Bank, Kate More Black Rock Chief Equity Strategist, and S&P global ratings Beth Ann Bovino, Steve Liesman and Rick Santelli are also with us and we don't have to explain it, Liesman. It's like, awesome 313! Great! But you immediately look to see if the futures sell off because we don't know what it means for the fed. That's the environment we're in. It didn't happen the futures actually ended up going up." BETH ANN BOVINO: "Because wage gains were 0.1%." JOE KERNEN: "Right which is also sick that's sick nobody's getting a raise so we can buy the market. So the whole, there's a lot of perverse motivations with this. it's a great number." STEVE LEISMAN: "There's a certain perversity to the numbers, Joe, which is these are great numbers and let me just take a look at what." JOE KERNEN: "celebrate it's awesome, its great." LEISMAN: "this is crazy retail up 50,000, okay and I think we're outside of the funky seasonal adjustment period which is January, December so that's up 50. Transportation warehousing up 15 we've been looking for more jobs in there because a lot more retail jobs are amazon delivery jobs than they are clerk jobs. Temporary help, that's a good sign for the future up 26,000, government surging 26,000 as well but look at these numbers. Construction up 61,000 there was some better weather apparently during the month that helped a little bit. But manufacturing up 31,000. those are good numbers for manufacturing, but here's the perversity, perversity is that the unemployment rate through -- let me give you these numbers here that we've had we did 175 in December, 239 in January, a 313 in February all of these numbers are double what the fed believes is the natural rate of the work force." (CNBC's "Squawk Box," 3/9/18)

Click To Watch

CNN's Christine Romans On Jobs Report: "Best Job Creation In Some Time ." CHRIS CUOMO: "jobs, jobs, jobs. Breaking news. The Labor Department releasing the jobs report for February just moments ago. Chief Business Correspondent Christine romans is here with the numbers. what do we see?" CHRISTINE ROMANS: "Lots Of Numbers, A big report here. Chris when you look overall 313 net new jobs created in the month, and the prior two months were revised higher by about 159,000 new jobs. So a really strong performance at the beginning of the year. That's the best job creation since I think the middle, like June 2016. So the best job creation in some time here. The unemployment rate, though, stayed steady, near a 17-year low, 4.1%. Why did it stay steady if you have all this hiring, why didn't that come down? Because people came into the labor market Chris. People are hearing there are jobs again and there have been jobs for a few years now and they're coming back in so that unemployment rate stayed steady. Sectors across the board from construction, to mining, manufacturing, to retail, health care again you saw a lot of good job creation there. So that was good here overall. Futures are higher, the stock market likes this." (CNN's "New Day" 3/9/18)

Click To Watch

Joe Scarborough: "Because This Was A Month Of Good News, Really Good News." MIKA BRZEZINSKI: "We have breaking news with the release of the monthly jobs report. CNBC's Dominic Chu join us now." JOE SCARBOROUGH: "And Dom we were expecting 200,000 new jobs. We're over 300,000. Unemployment stays at 4.1%. What does it mean for the markets? What does it mean for the economy?" DOMINIC CHU: "It means we have a better than expected jobs report, Joe and Mika. What you're seeing in the marketplace right now is a stock market that's reacting at least for the time being positively. Like you said, that 313,000 jobs created headline number is getting a lot of attention. The unemployment rate does stay steady at 4.1%. One other employment measure that some people like to look at is something called the U-6, with the Bureau of Labor Statistics. Its jargon for the underemployment rate, the true unemployment rate some people look at it as. It stays unchanged at 8.2%. One of the headlines that a lot of people are going to focus on, especially in Washington, D.C., is the labor force participation rate. that actually went higher, meaning more Americans are actually out there looking for jobs not considered structurally unemployed, giving up on looking for a job, they've actually entered the workforce again. That's a pretty decent sign there. I would also note that the job growth, where the jobs are, came from a few pretty specific locations. When it comes to construction, we saw 61,000 jobs created there. Retail and then professional services each added 50,000 jobs, and even manufacturing added 31,000. you take all those together, along with some numbers with regard to average hourly earnings, they came in less than expected so people are working, but they're not making nearly as much money as people thought they were going to. it leads to what some call on wall street a goldilock scenario where the economy is getting more people involved in the workplace but you don't have fears that inflation or rising prices is really going to drive things, at least for the time being, for the federal reserve to raise interest rates. so that's the reason why you're seeing a lot of green on the board, guys. SCARBOROUGH: "All right CNBC's Dominic Chu, thank you so much, really appreciate it. Those are the best numbers for new jobs in a year and a half. You'd expect unemployment rate to go down but it didn't go down because actually the job participation rate crept up to 63%. I will say the unemployment rate is the most meaningless number because this was a month of good news, really good news, that more people are going out, looking for jobs. Really good news that we had new jobs, more new jobs." (MSNBC's "Morning Joe," 3/9/18)

Click To Watch

MSNBC's Josh Barro Called Todays Jobs Report "Very Strong." "Very strong jobs report." (John Barro, Twitter Feed , 3/9/18)

The Washington Post's Philip Bump Said "Whoa. +313k Jobs In February." "Whoa. +313k jobs in February." (Philip Bump, Twitter Feed , 3/9/18)

The Jobs Report "Crushed Expectations" In February. "The economy added 313,000 jobs in February, crushing expectations, while the unemployment rate was 4.1 percent, according to a Labor Department report Friday that could help quell inflation fears." (Jeff Cox, "Nonfarm Payrolls Increase By 313,000 In February Vs. 200,000 Est.," CNBC , 3/9/18)

Economist Justin Wolfers Said Of February's Jobs Report "What A Month!" "Payrolls rose a whopping 313k in February. What a month! Unemployment remains constant at 4.1% (remember, it's measured in a different survey)." (Justin Wolfers, Twitter Feed , 3/9/18)

Economist Frederik Ducrozet Noted That This Months Jobs Report Contained The "Largest Increase In The US Participation Rate In Over 8 Years." "Largest increase in the US participation rate in over 8 years." (Frederik Ducrozet, Twitter Feed , 3/8/18)

The Jobs Report "Far Exceeded Analysts' Expectations." "Breaking News: The U.S. economy added 313,000 jobs in February, far exceeding analysts' expectations. The jobless rate stayed at 4.1 percent." (The New York Times, Twitter Feed , 3/9/18)

The Labor Marked Added 313,000 Jobs In February, The Most In One And A Half Years. "WASHINGTON (AP) - US hiring surge adds 313,000 jobs in February, most in 1 ½ years, as jobless rate stays 4.1 percent." (Julie Pace, Twitter Feed , 3/9/18)

There Was A "Huge Pop In Payrolls" In February. "First impression on jobs: huge pop in payrolls supported by bump in labor force participation; wage growth moderates. Preliminary take: there's still room to run in this job market!" (Jared Bernstein, Twitter Feed , 3/9/18)

February's Jobs Report Was "Very Strong." "Very strong jobs report this morning. Strong job growth, hourly work week up, modest wage gains." (Jim Kessler, Twitter Feed , 3/9/18)

IN FEBRUARY, CONFIDENCE IN THE ECONOMY HIT RECORD HIGHS AS THE POSITIVE IMPACTS OF THE TAX BILL WERE FELT

Consumer Confidence Rose To Its Highest Level Since 2000 In February

The Associated Press : "U.S. Consumer Confidence Rises To Highest Level Since November 2000 ." (Paul Wiseman, "U.S. Consumer Confidence Rises To Highest Level Since November 2000," The Associated Press , 2/27/18)

The Consumer Conference Board Reported That Consumer Confidence Rose To 130.8 In February, The Highest It Has Been In More Than Fifteen Years. "American consumers are the most confident they've been since 2000. The Conference Board says its consumer confidence index rose to 130.8 in February, highest since November 2000 and up from 124.3 in January. The business research group's index measures consumers' assessment of current conditions and their outlook for the next six months. They feel better about today's economy than they have since March 2001. Their outlook also improved." (Paul Wiseman, "U.S. Consumer Confidence Rises To Highest Level Since November 2000," The Associated Press , 2/27/18)

The University Of Michigan's Consumer Sentiment Index "Remained Quite Favorable In February, At Its Second Highest Level Since 2004." "Consumer sentiment remained quite favorable in February, at its second highest level since 2004. Consumers based their optimism on favorable assessments of jobs, wages, and higher after-tax pay. The highest proportion of households since 1998 reported that their finances had improved compared with a year ago and anticipated continued gains during the year ahead." ("Survey Of Consumers, University Of Michigan, Accessed 3/8/18)

Bloomberg's Consumer Comfort Index Rose To Its Second Highest Level Since 2001, "As The Benefits Of Increased Take-Home Pay From Tax Cuts" Took Effect . "Americans' sentiment rose last week to the second-highest level since 2001, as the benefits of increased take-home pay from tax cuts outweighed concerns about stock-market volatility, according to the weekly Bloomberg Consumer Comfort Index released Thursday." (Shelly Hagan, "U.S. Consumer Comfort Rises To Second-Highest Level Since 2001," Bloomberg , 3/8/18)

  • Americans Are "Become Increasingly Upbeat About Their Personal Finances After Last Year's Tax Cuts Began Boosting Take-Home Pay In January And February." "Americans have become increasingly upbeat about their personal finances after last year's tax cuts began boosting take-home pay in January and February. Full-time workers, married Americans and homeowners all expressed improved optimism, even as President Donald Trump's plans to impose tariffs on imported metals dented stock prices." (Shelly Hagan, "U.S. Consumer Comfort Rises To Second-Highest Level Since 2001," Bloomberg , 3/8/18)

Small Business Confidence "Surged" In The Wake Of The Tax Cuts And Jobs Act

Small Business Confidence "Surged" In The Wake Of The Tax Cuts And Jobs Act. "Small-business confidence is surging in 2018 as optimism rises among small-business owners about the newly enacted tax-reform package, according to the latest CNBC/SurveyMonkey Small Business Survey, released Tuesday." (Kate Rogers, "Small-Business Confidence Hits Record High In 2018 After Trump Tax-Reform Win," CNBC , 2/20/18)

The CNBC/SurveyMonkey Small Business Confidence Index Saw A Five Point Increase In Q1 2018 "A Record High And The Largest Quarter-To-Quarter Move The Index Has Seen." "The CNBC/SurveyMonkey Q1 Small Business Confidence Index saw an increase of five points, from 57 to 62, a record high and the largest quarter-to-quarter move the index has seen since CNBC and SurveyMonkey began measuring last year. This is the first survey since President Donald Trump signed the Tax Cuts and Jobs Act into law on December 22, 2017." (Kate Rogers, "Small-Business Confidence Hits Record High In 2018 After Trump Tax-Reform Win," CNBC , 2/20/18)

Small Business Owners' Opinions On The Tax Cuts Have "Shifted Significantly" As They Start To See Effects Hit Home, "Twice As Many Now Expect Changes In Tax Policy To Have A Positive Rather Than Negative Effect On Their Businesses." "In the Q4 survey, small-business owners were split evenly on the core question about the effect that tax policy would have on their business. Opinions have shifted significantly: Twice as many now expect changes in tax policy to have a positive rather than negative effect on their businesses. Forty-six percent of those surveyed say tax policy changes will have a positive effect, up from 38 percent in the fourth quarter. The number of those saying tax policy changes will have a negative impact fell sharply, from 36 percent in the fourth quarter to 23 percent in the most recent survey." (Kate Rogers, "Small-Business Confidence Hits Record High In 2018 After Trump Tax-Reform Win," CNBC , 2/20/18)

Juanita Duggan, President Of The NFIB Said That These Historic Numbers Mean That "Small-Business Owners Are More Than Just Optimistic, They Are Ready To Grow Their Business." "'These numbers are historically high,' Juanita Duggan, president and CEO of the NFIB, told CNBC. 'This shows small-business owners are more than just optimistic, they are ready to grow their business.'" (Kate Rogers, "Small-Business Confidence Hits Record High In 2018 After Trump Tax-Reform Win," CNBC , 2/20/18)

February Is Another In A "Series Of Healthy Readings" For The Manufacturing Industry

In February, The Nation Gained 31,000 Manufacturing Jobs. ( Bureau Of Labor Statistics , Accessed 3/9/18)

This Latest Reading Is The Latest In "A Series Of Healthy Readings In The Survey-Based Measure Of Manufacturing That's Being Fueled By Improving Global Economies And Firm Business Investment." "The latest advance extends a series of healthy readings in the survey-based measure of manufacturing that's being fueled by improving global economies and firm business investment. It also comes on the heels of a late-year pickup in consumer spending, which advanced in the fourth quarter at the fastest pace in more than a year." (Katia Dmitrieva, "Manufacturing In U.S. Expands At Fastest Pace Since May 2004," Bloomberg , 3/1/18)

"The Purchasing Managers Group's Gauge Of Export Orders Was The Strongest Since April 2011." "The purchasing managers group's gauge of export orders was the strongest since April 2011. While orders and production were a touch weaker in February than the prior month, the readings are nonetheless robust." (Katia Dmitrieva, "Manufacturing In U.S. Expands At Fastest Pace Since May 2004," Bloomberg , 3/1/18)


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