Trump v. Obama Jobs Market – Midterm Review

The Bureau of Labor Statistics (BLS) released its final jobs report before the midterm election on Tuesday.

The pre-midterm final verdict is in.

The Obama economy created 423k more total non farm payroll jobs and 194k more private sector jobs in his administration’s last 21 months in office than did the Trump economy’s first 21 months.   The Obama economy averaged 216k monthly jobs while the Trump economy averaged 193k non farm payrolls.

Context is always good.  President Trump’s economy is impressive when considering it is running up against severe labor constraints as the unemployment rate hovers at multi-decade lows.   There is not a big pool of labor to draw from and wages are beginning to pick up due to these shortages.

Zero-Sum Game

Looking at the table below, we suspect the jobs market will now become a zero-sum game going forward.   For example,  employment growth in the Leisure and Hospitality has slowed under President Trump, while job growth in Mining and Logging sector has increased dramatically due to the rise in oil prices.   Could this be due to oil roughnecks quitting their bartending jobs and moving back to the oil patch?

We also suspect the retiring baby boomers are underfunded in their retirement and will remain in the workforce will beyond traditional retirement ages.

Macro Indicators

President Trump’s economy has generated, on average,  58 bps more wage growth over the similar 21-month periods.   Inflation is running a bit hotter under President Trump and the annual GDP growth rate has almost doubled, which indicates the economic treasures are still accruing disproportionately to capital.

 

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