February’s blockbuster jobs report — a huge gain in employment and drops in the unemployment rate among key groups — was not matched by the March number released Friday morning. The economy added 103,000 jobs last month, according to preliminary estimates, and the number of jobs created in January and February was adjusted downward by 50,000 (down 63,000 in January and up 13,000 in February).
That soaring number in February, celebrated by President Trump, looks more like an outlier. The three-month average of jobs created was about 202,000 — largely in line with that average over the past several years. (The average three-month average since January 2015 is 204,000.)
There has been lingering concern that the economy has hit “full employment,” a level of unemployment that’s thought to be the natural bottom, given economic conditions. (In a healthy economy, there will always be some unemployment — people changing jobs, etc.)
It’s worth noting that the national unemployment rate has been stuck at 4.1 percent for the past six months — the second-longest pause on record. Only a nine-month stretch in 1968 and 1969 lasted longer. When that pause ended, unemployment quickly rose.
All that aside, it’s worth looking at the jobs numbers to evaluate a central claim to Trump’s key policy move.
The December tax cuts were sold on the promise that they would boost an already-strong economy, driving up wages and increasing job growth. The February jobs numbers seemed like possible evidence on that second point, and wage numbers from the January report suggested that wages were on their way up.
In the March jobs report, the picture isn’t as clear.
“In March,” the Bureau of Labor Statistics writes, “average hourly earnings for all employees on private non-farm payrolls rose by 8 cents to $26.82. Over the year, average hourly earnings have increased by 71 cents, or 2.7 percent. Average hourly earnings for private-sector production and nonsupervisory employees increased by 4 cents to $22.42 in March.”
Wages are up 8 cents hourly overall — but half that amount is for production and nonsupervisory employees, presumably the sort of blue-collar employees that Trump’s increased-wage promise targeted.
Weekly earnings in most industries have increased at generally consistent rates over the past decade. (The mining and logging industry is an exception, seeing higher earnings and more volatility.)
If we compare the past year for each of those groups, it’s not clear that there has been a significant boost post-tax cuts (January to March) than in the previous three-month periods. Only in manufacturing was the earnings increase higher in the most recent three months for nonsupervisory/production employees than in the last three months of 2017.
The overall weekly earnings increase for all nonsupervisory/production employees was 0.9 of a percent in the second quarter of 2017, 0.5 of a percent in the third, 1.1 percent in the fourth and 0.2 of a percent in the period from January to March.
That said, wages did still increase — and at a slightly faster pace than expected. (When wage growth in January was higher than expected, the markets sank in response to worries about inflation.) Economists expect wages to increase more during times of low unemployment, as employers compete for fewer people.
The tax cuts, though, were supposed to be “rocket fuel” for the economy, giving businesses a big tax cut that would then result in increased wages for their employees. A survey in February found that about 13 percent of the corporate tax cuts were going to workers; unions say their workers aren’t seeing the benefits.
It’s only been three months, but, then, rocket fuel isn’t really known for its slow burn.