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August Employment Numbers: Pace of Job Growth From February 2010 to Last Week Has Been Same Regardless of Trump Bluster

The U.S. Labor Department just reported the nation’s payroll and unemployment rate numbers for August 2018 this past Friday, September 7th. Any bluster from President Trump about how great things are aside, the numbers show that the pace of employment growth between the two administrations- one for 83 months and the other for 19 months- has been nearly identical. And there has been no increase in labor force participation under President Trump- the proportion of adult Americans working or looking for work- employment growth has not been sufficient to pull an increase in the proportion of Americans who have joined the labor force.

Payroll employment increased by 201.000 in August over July, and the unemployment rate was unchanged at 3.9%. Employment growth numbers for June and July were revised down, so that June payroll growth was 208,000, not 248,000 as previously reported. Growth for July was revised down 10,000, from 157,000 to 147,000. Revisions brought growth down by 50,000 over the two months. After revisions, job gains have averaged 185,000 per month over the last three months, according to the agency.

The pace of growth has not changed between the last 83 months of the Obama Administration and the first nineteen months of the Trump Administration. Donald Trump inherited a healthy economy, and there is no uptick in the pace of employment growth.

Consider this table of seasonally adjusted monthly national payroll employment since January 2008 to August 2018 from the Bureau of Labor Statistics.

employment 2008-2018

The painful economic damage of the Great Recession resulted in a loss of 8.7 million jobs between January 2008 and when employment losses finally stopped in February 2010, split virtually equally between the last year of President Bush and the first year of President Obama. Between July 2008 and July 2009 the economy lost 6.8 million jobs.

From the time job losses bottomed out in February 2010, through the nearly seven years of recovery during Obama’s Presidency, until January 2017, when President Trump took over, the economy gained 15.97 million jobs, a pace of 192,000 jobs a month for 83 months. From January 2017 to August 2018, while Donald Trump has been President, the economy has gained 3.58 million jobs, a pace of 188,573 jobs a month for the past 19 months. In other words, nearly exactly the same as Obama (about 3,400 jobs less a month under Trump).

Another measure of labor economic health is the labor force participation rate, a measure of what percentage of adults are working or looking for work. At the end of the Clinton Administration, about 67% of Americans were in the labor force, and even at the end of 2007, 66% were in the labor force. As the recession worsened, more Americans were dropping out of the labor force, and Baby Boomers were also retiring at rapid rates, bringing labor force participation down to under 63% by January 2017. But in the 19 months since Trump became President, there has been little to no movement in the labor force participation rate, meaning a higher proportion of Americans are not returning to the labor force. The labor force participation rate was 62.9% in January 2017; it was 62.7% in August 2018, according to this table from the Bureau of Labor Statistics:

Labor Force Participation

It’s good to see the economy improve- but the improvements are not dramatic- the pace of employment growth is the same( practically identical) as the Obama administration, and a dramatic increase in the number of Americans joining the labor market has not occurred.

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