Trump to inherit improving economy
The departing president rarely hands off an improving economy to a successor of the opposing party, but Donald Trump can expect to inherit an economy that has added jobs for 80 months, according to the government’s report Friday.
Departing occupants of the White House rarely hand off an improving economy to a successor from the opposing party.
When Barack Obama was waiting in the wings after the 2008 presidential election, for example, the economy was in a severe downward spiral.
But according to the government’s report Friday, Donald Trump can expect to inherit an economy that has added privatesector jobs for 80 months, put another 178,000 people on payrolls last month and pushed the unemployment rate down to 4.6 percent today from 4.9 percent the previous month. Consumers are expressing the highest levels of confidence in nearly a decade.
The Federal Reserve is confident enough about the economy’s underlying strength that it is set to raise the benchmark interest rate when it meets this month.
The jobless rate for November, the lowest since August 2007, “is a testimony to how strong employment growth has been,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.
Jason Furman, chairman of President Obama’s Council of Economic Ad-
visers, remembers the transition eight years ago, when he was crammed into his office with a circle of key officials as the latest jobs numbers from the Labor Department landed.
“It was an utterly terrifying time, the likes of which none of us had ever seen in our lifetimes,” Furman recalled. Fearing that “the economy was following the same trajectory that it did at the beginning of the Great Depression,” everyone was focused on how to “rapidly slow the bleeding and figure out how to get the economy growing again.”
By contrast, Furman said, “the economy today is healthy and it’s improving.”
For all the improvements, tens of millions of Americans understandably feel that the recovery has passed them by. Those without skills are relegated to low-paying positions without steady schedules, security and benefits. Breadwinners who once held well-compensated manufacturing jobs are angry about being forced to settle for lower-wage service jobs — or no jobs at all. In general, average hourly pay slipped in November and has risen just 2.5 percent in the past year.
Profound anxiety, particularly among the white working class, about the ability to reach or comfortably remain in the middle class is one of the factors that helped propel Trump to the White House.
Pockets of weakness also surfaced in the latest jobs report, which showed that more people dropped out of the labor force last month than joined it. Manufacturing jobs declined further, and there are still plenty of part-time workers who would rather be full time. And while the official jobless rate for high school graduates fell to 4.9 percent, it is more than twice the rate for college graduates.
“There is a bifurcation of the workforce,” Jonas Prising, CEO of the ManpowerGroup, one of the largest recruiters in the U.S. People who are able to take advantage of advances in technology, globalization and other shifts that favor those with the right skills for advanced services are thriving.
For others, the prospects do not look good. “There used to be part of the workforce that had well-paying jobs that were low or unskilled,” Prising said. “Those kinds of jobs are very difficult to find today.”
The deal Trump made with the heating and cooling company Carrier this week to keep 1,000 manufacturing jobs from moving to Mexico from Indiana is emblematic of the kind of actions he said he would take as president to help blue-collar workers.
But there are limits to the power of persuasion.
Betsey Stevenson, a former economic adviser to Obama, said that manufacturing, while still a driving force in the economy, employed fewer and fewer people. More than 80 percent of jobs are now in the service industry, Stevenson said, and Trump should be thinking more about how to match workers with those jobs.