The July Non-Farm Payroll report has been out a couple of hours, and it’s largely good news for Hillary Clinton and the Democrats. In July, the US economy created 255,000 new jobs. The unemployment rate stayed steady at 4.9% as the participation rate rose one-tenth of a percent to 62.8%. Average hourly earnings rose 0.3% for a year-over-year increase of 2.6%, while the average of hours worked ticked up 0.1% to 34.5 hours. Based on the facts, the economy is ticking over reasonably well, and this refutes the argument of the Trump campaign that the economy is cratering.
New York Times cited Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and a former member of the Obama administration, saying, “The idea that Republicans are touting that the job market is a wreck is clearly belied by the data. What matters most to people isn’t G.D.P. growth, it’s jobs and wages. While you can point to some indicators that are underperforming, the labor market isn’t one of them, and that’s where the rubber hits the road for most working households.”
Less partisan commentators echoed these sentiments. “This is a validator,” said Michael Gapen, chief United States economist at Barclays. “This is a report that indicates that the slowdown in hiring earlier in the year has been reversed.”
“This was everything you could have asked for, maybe more,” said Michelle Meyer, head of United States economics at Bank of America Merrill Lynch. “We’re seeing new entrants into the labor market, which implies a longer runway for the business cycle.
The Trump campaign made a great deal of the GDP figures that came out on August 1. Growth was 1.2% (which is not the same as a shrinking economy) in the second quarter, and the first quarter was revised downward to 0.8%. The interplay of quarterly GDP figures and monthly job numbers is complex, but from a political standpoint, GDP is a theoretical number. The jobs figure translates into votes.
Mr. Trump has a big speech coming up on Monday. Advanced copies of the text include these lines, “Americans will have two choices presented to them this November, to stay on the same path that has cost Americans millions of jobs, and declining incomes, or change that can finally allow Americans to reach their potential and become great again.”
Job growth has been positive since October 2010. Since then, the US economy has added jobs every month. Yet the Trump people are trying to sell the idea that the American economy is collapsing. David Malpass was on CNBC earlier today, noting a still historically low participation rate. “What you’ve got is a lot of people being left out of the upturn,” he told CNBC.
This journal does not dispute that. What one does dispute is the wisdom of arguing against the facts. Far better for the Trump campaign would be to argue that the economy is doing well, but the people who are making the profits are not the people profiting from their blood, sweat, toil and tears. Those white, blue-collar males are his base, but it would be more effective among the 10% of the population with little loyalty to either party (the people who will decide the election) if he were to admit that the big picture were not as dark and terrible as he is arguing.