Jobs report is awkwardly good for president

DONALD Trump keeps getting lucky. First, of course, there was his election to the presidency. Now, the first major economic report of his administration has gone his way.

On Friday, the Labor Department announced that 227,000 new jobs were created last month.

That was well above the 175,000 that were expected by the experts and a lot better than the 156,000 created in December.

While the unemployment rate did rise 0.1 of a percentage point, to 4.8 percent, the Labor Department in its press release called that “little changed.”

The good numbers create a dilemma for President Trump, who has questioned the validity of government employment data, especially the unemployment rate.

Will the new president now embrace the figures he so recently hated? Well, yeah, probably. As my readers already know, employment data — especially in January — isn’t all that it seems. The 227,000 new job figure is after the Labor Department does a seasonal adjustment.

There is never really job growth in January. There can’t be, with so many companies — especially in the retail sector — downsizing after the holiday.

In fact, the raw data shows that 2.9 million jobs were actually lost last month.

The government adjusts all of its data for the seasons to avoid wild fluctuations because of holidays, school breaks and such. This January’s loss was comparable with the one recorded in January 2016.

What isn’t comparable is the degree of the seasonal adjustment that the Labor Department used. The department changes its seasonals each month, and that seems to have been the difference in January between an ordinary report and one that Trump can crow about.

If Trump had been in office longer and had already put his people in charge at the Labor Department, I’d be suspicious that some- thing sinister had gone on. But the Trump administration hasn’t had time to job the unemployment numbers just yet.

So the seasonal adjustment change seems to be nothing more than a lucky bounce. And these adjustments tend to bounce the other way later in the year, so be prepared.

As I’ve explained before, January’s headline employment figure — the one the Labor Department reports after seasonal adjustment — is usually disappointing.

Still, there have been a couple of recent years when, like this one, the figure turns out to be surprisingly good. In the previous good years, mild January weather was usually the main factor.

And at least around here, the warmer January helped the jobs numbers — as well as many people’s backs — since it had little snow.

This January’s figure also overcame another hurdle — the subtraction of jobs from the count because of something called the Birth/Death Model.

The Labor Department uses this model to guess at the number of new jobs being created by compa- nies that are being “born” without the government knowing it or quietly dying without reporting to authorities.

The first month of the year is always one of the “dying” months, and it usually means that the report for the first month of the year is disappointing.

This time the Labor Department removed 247,000 jobs from the count because of the Birth/Death Model guesstimate, and yet it didn’t matter much to the headline number,

The better-than-expected employment number creates a number of interesting scenarios.

For one thing, it may give Trump some breathing room — the so-called honeymoon that most presidents enjoy when first taking office.

Moves by Trump on things like foreign trade and immigration reform have dominated the headlines because of incessant attacks by critics.

But Trump won the election on economic issues. So critics might be hesitant to keep up the pace of their attacks now that there is a tailwind for the president on this one vital issue. However, the political game is far from over as far as the economics are concerned. Economic growth in the fourth quarter of 2016 was very mediocre, and the year as a whole was the weakest in half a decade. The US economy doesn’t turn on a dime — even for Trump. Gross domestic product in the first quarter of Trump’s presidency is showing an improvement, but these upward blips have been unsustainable before. The good jobs report also creates a problem for the Federal Reserve, which decided this week to hold interest rates steady. The Fed has vowed several rate hikes this year, just like last year. And it desperately needs to keep that promise in order to keep its credibility with the financial markets, which are already boosting borrowing costs beyond the Fed’s current 0.5 percent rate. Friday’s employment report puts the Fed one step closer to those rate hikes.