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The Economy Continues To Boom Under President Trump

- February 2, 2018

As Wages Grow At The Fastest Rate Since 2009, The U.S. Economy Is Off To A Very Strong Start In 2018

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TOP TAKEAWAYS

  • The U.S. labor market continued to expand in January, adding 200,000 jobs and the unemployment rate remained at a 17-year low of 4.1 percent in January.
  • In January, wages increased at the fastest annual rate since 2009; analysts have credited the Tax Cuts and Jobs Act as at least partially responsible for this jump in wages.
  • Two measures of consumer optimism rose in January, and the Bloomberg consumer comfort index is at its highest level in almost 17 years.
  • Jason Furman, Chairman of President Obama's Council of Economic Advisers, said the January jobs report was "very strong," and "pretty amazing."
  • Real GDP increased by 2.3 percent in 2017 compared to 1.5 percent in 2016, largely thanks to President Trump's pro-growth policies.

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TODAY'S STRONG JOBS REPORT SHOWS LABOR MARKETS CONTINUED TO GROW IN JANUARY

In January, The Unemployment Rate Remained At A 17-Year Low4.1 Percent

Unemployment Remained At 4.1 Percent For The Fourth Straight Month, The Lowest Level Since 2000. "The Labor Department says the unemployment rate remained 4.1 percent for a fourth straight month, the lowest level since 2000." (Christopher Rugaber, "The Labor Department Says The Unemployment Rate Remained 4.1 Percent For A Fourth Straight Month, The Lowest Level Since 2000," Associated Press , 2/2/18)

Strong Job Growth Continued In January, As Nonfarm Employment Increased By 200,000 Jobs, Bringing The Total Jobs Created Under President Trump To 2.1 Million

Nonfarm Payroll Increased By 200,000 In January. ( Bureau Of Labor Statistics , Accessed 2/2/18)

Nonfarm Payroll Increased By 2,114,000 In Since President Trump Took Office. ( Bureau Of Labor Statistics , Accessed 2/2/18)

The January Jobs Report Beat Expectations By 20,000 Jobs. "Nonfarm payrolls grew by 200,000 in January and the unemployment rate was 4.1 percent, the Bureau of Labor Statistics reported in a closely watched report from Friday. Economists surveyed by Reuters had been expecting jobs growth of 180,000 and an unemployment rate of 4.1 percent." (Jeff Cox, "Job Growth Up 200,000 In January, Better Than Expectations, And Wages Up," CNBC , 2/2/18)

Wage Growth Picked Up In The Fourth Quarter of 2017

In January, Wages Rose At Their Fastest Rate Since 2009. " U.S. hiring picked up in January and wages rose at the fastest annual pace since the recession ended, as the economy's steady move toward full employment extended into 2018." (Sho Chandra, "U.S. Added 200,000 Jobs In January; Wages Rise Most Since 2009," Bloomberg , 2/2/18)

The January Jobs Report "Shows Wage Growth Is Finally Picking Up." "Friday's jobs report shows wage growth is finally picking up. Average hourly earnings rose 2.9% in January from a year earlier, the strongest gain since 2009." (Wall Street Journal Money Beat, Twitter Feed, 2/2/18)

The "Robust Jobs Market" Is Putting Upward Pressure On Wages, And There Were Signs Of A "Pickup" In Wage Growth In Q4 2017. "The robust jobs market is gradually putting upward pressure on compensation, with other data on Wednesday showing a solid increase in labor costs in the fourth quarter. Tightening labor market conditions and signs of a pickup in wage growth are likely to be welcomed by Federal Reserve officials who have long expressed concern about benign inflation." (Lucia Mutikani, "U.S. Private Payrolls Rise Strongly, Wage Growth Picking Up," Reuters , 1/31/18)

U.S. Labor Costs "Increased Solidly" In The Fourth Quarter Of 2017. " U.S. labor costs increased solidly in the fourth quarter and growth in compensation is expected to accelerate as a tightening labor market forces employers to raise wages to retain and attract workers." ("U.S. Labor Costs Increase Solidly In The Fourth Quarter," Reuters , 1/31/18)

The Tax Cuts Passed By Republicans Are Expected To "Bolster Compensation Growth." "A $1.5 trillion tax cut package pushed through by the Trump administration and the Republican-controlled U.S. Congress in December is also expected to bolster compensation growth. The tax cut has resulted in some companies either paying out one-time bonuses or raising wages for employees." (Lucia Mutikani, "U.S. Private Payrolls Rise Strongly, Wage Growth Picking Up," Reuters , 1/31/18)

Unemployment Claims Beat Expectations In January

Unemployment Claims Decreased By 1,000 For The Week That Ended Jan. 27 And Were Adjusted Down 2,000 For The Previous Week. "Initial claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 230,000 for the week ended Jan. 27, the Labor Department said on Thursday. Data for the prior week was revised to show 2,000 fewer claims received than previously reported." ("US Jobless Claims Unexpectedly Fall As Job Market Strengthens," CNBC , 2/1/18)

Economists Had Expected Unemployment Claims To Rise, Not Decline. "Economists polled by Reuters had forecast claims rising to 238,000 in the latest week. The Labor Department said claims for Maine were estimated last week. It also said claims-taking procedures in Puerto Rico and the Virgin Islands had still not returned to normal months after the territories were slammed by Hurricanes Irma and Maria." ("US Jobless Claims Unexpectedly Fall As Job Market Strengthens," CNBC , 2/1/18)

Less Americans Are Filing For Unemployment, Pointing Towards A Strengthening Economy . "The number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to a tightening labor market and strengthening economy at the start of the year." ("US Jobless Claims Unexpectedly Fall As Job Market Strengthens," CNBC , 2/1/18)

AMERICANS ARE FEELING GOOD ABOUT THE STATE OF THE ECONOMY AS CONSUMER CONFIDENCE AND WAGES CONTINUE TO GROW

Consumer Confidence Beat Expectations In January

The Bloomberg Consumer Comfort Index Is At Its Highest Level In Almost 17 Years. "U.S. consumer confidence, along with a measure of Americans' views of the economy, advanced last week to the highest levels in nearly 17 years, the Bloomberg Consumer Comfort Index showed Thursday." (Shelly Hagan, "U.S. Consumer Comfort Highest Since 2001 On Optimism For Economy," Bloomberg , 2/1/18)

The Consumer Confidence Index Was Higher Than Expected In January, Rising To 125.4. "Consumer optimism pushed higher than anticipated in January, after a surprise decline the previous month. The Conference Board's measure of consumer confidence rose to 125.4 in January, higher than the 123.1 anticipated by economists polled by Reuters. The measure had declined to 122.1 in December." (Michael Sheetz, "Consumer Confidence Jumps As Americans Expect 2017 Momentum To Continue," CNBC , 1/30/18)

Consumers Are "Confident" The "Solid" Economic Growth Rate Will Continue Into 2018. "'Consumers remain quite confident that the solid pace of growth seen in late 2017 will continue into 2018,' Franco said." (Michael Sheetz, "Consumer Confidence Jumps As Americans Expect 2017 Momentum To Continue," CNBC , 1/30/18)

Consumer Confidence During President Trump's First Year In Office Has Risen Steadily And Significantly. (Michael Sheetz, "Consumer Confidence Jumps As Americans Expect 2017 Momentum To Continue," CNBC , 1/30/18)

THIS MONTH'S JOBS REPORT HAS DRAWN WIDESPREAD PRAISE ACROSS THE SPECTRUM

This Month's Jobs Report Is Being Hailed As "Pretty Amazing"

The 2.9 Percent Yearly Gain In Hourly Wages "Big News" Is The Fastest Increase Since Mid-2009. " U.S. adds 200,000 new jobs in January and unemployment stays at 4.1%. Big news is 2.9% yearly gain in hourly wages, the fastest increase since mid-2009." (Market Watch Economy, Twitter Feed , 2/2/18)

In January, Hiring Increased For The 88th Straight Month, The Longest Streak On Record. " Breaking News: The U.S. economy added 200,000 jobs in January. It was the 88th straight month that hiring increased, the longest such streak on record." (The New York Times, Twitter Feed , 2/2/18)

Reuters Touted A "Better-Than-Expected 200,000 Jobs." "U.S. economy added a better-than-expected 200,000 jobs in January, unemployment rate steady at 4.1 percent underscoring the strong momentum in the economy." (Reuters, Twitter Feed , 2/2/18)

Economist Joe Brusuelas Says This Jobs Report Is The "Strongest In Some Time." "Talking to economist @joebrusuelas about jobs report. Says it is strongest in some time. But solid wage growth will mean inflation is real concern for Fed. He now expects 4 rate hikes this year." (Paul R. La Monica, Twitter Feed , 2/2/18)

Jason Furman, Chairman Of President Obama's Council Of Economic Advisers, Said The Jobs Report Was "Very Strong," And "Pretty Amazing." "Very strong jobs report. 200K pretty amazing for this stage of the cycle, we should be happy if we even averaged 150K this year. Flat LFPR also a good sign, means age-adjusted LFPR rising. Most notable was 2.9% wage increase in last 12 months, a rise in pace." (Jason Furman, Twitter Feed , 2/2/18)

CNN: Huge Jump In Wages Is In Part Due To Tax Reform. CNN's JOHN BERMAN: "We do have breaking news. The labor department releasing the January jobs report. Alison Losik joins us here with the numbers, Alison." ALISON KOSIK: "Good Morning since Chris isn't here, let's get at it. The number of jobs added in January, 200,000, so that's a strong start to 2018 and beats what we saw in December. Unemployment holding steadyat 4.1% that's a 17 year low, many economists think that's a level that marks full employment. Many economists have been saying look at this point we should be seeing a rise in wages, in what Americans are taking home in their pocketbooks. And that's exactly what they're seeing because we learned in this report that wage growth jumped from 2.5% to 2.9%. That's a huge jump. And you can attribute that for a couple of reasons, for one, the tax plan. We saw dozens of companies hand out raises and bonuses to their employees in January. We also heard that 18 states across the country raised their minimum wages. So all of helping to raise that overall wage growth from 2.5 to 2.9%. …" BERMAN: "Inflation worries is what that is. The numbers are very good." ALISYN CAMEROTA: "Absolutely. That's great news." (CNN's "New Day," 2/2/18)

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MAKING THE ECONOMY GREAT AGAIN: SINCE PRESIDENT TRUMP TOOK OFFICE, THE ECONOMY HAS TAKEN OFF

In 2016, Economic Growth Was Stagnant

Real GDP Increased By 1.5 Percent In 2016. "Real GDP increased 2.3 percent in 2017 (that is, from the 2016 annual level to the 2017 annual level), compared with an increase of 1.5 percent in 2016 (table 1)." ("National Income and Product Accounts Gross Domestic Product: Fourth Quarter and Annual 2017," Bureau Of Economic Analysis , 1/26/17)

In The Last Quarter Of 2016, The U.S. Economy Grew At Its Slowest Pace Since 2011. "The U.S. economy grew at an annual rate of 1.6% in 2016, the Commerce Department reported Friday. In the last three months of the year -- between October and December -- the economy grew at an annual rate of 1.9%. It's the slowest pace of growth since 2011." (Patrick Gillespie, "Still Slow: U.S. Economy Grew 1.6% In 2016," CNN , 1/27/17)

President Obama Is The First President Since Hoover To Not Have At Least One Year Of At Least 3 Percent GDP Growth. "Every president since then has seen at least one calendar year with annual GDP growth of at least 3 percent or higher. The best average growth in a single calendar year under Obama is 2.6 percent in 2015, and never 3 percent or more. No president has experienced that since Hoover." (Joshua Gillin, "Trump's Claim About Weak Economic Growth Under President Obama Doesn't Tell The Full Story," Politifact , 10/31/16)

After President Trump Took Office, The Economy Took Off

Real GDP Increased By 2.3 Percent In 2017. "Real GDP increased 2.3 percent in 2017 (that is, from the 2016 annual level to the 2017 annual level), compared with an increase of 1.5 percent in 2016 (table 1)." ("National Income and Product Accounts Gross Domestic Product: Fourth Quarter and Annual 2017," Bureau Of Economic Analysis , 1/26/18)

The United States Economy "Rebounded Strongly" In April And June 2017 . "The U.S. economy rebounded strongly between April and June, government data showed Friday morning, as businesses invested more and consumers shelled out for furniture, washing machines and other goods." (Ana Swanson, "U.S. Economy Rebounds In The Second Quarter," The Washington Post , 7/28/17)

Carl Tannenbaum, Chief Economist At Northern Trust In Chicago Said "We Closed 2017 In A Very Good Position." "Carl Tannenbaum, chief economist at Northern Trust in Chicago, said there was plenty to be pleased about even though the number was lower than many analysts had predicted. 'We closed 2017 in a very good position,' he said. 'There are a lot of strengths in the fourth quarter.'" (Patricia Cohen, "G.D.P. Grew At 2.6% Annual Rate In 4th Quarter As Economy's Path Stays Firm," The New York Times , 1/26/18)

Economists Have Credited President Trump With The Accelerated Economic Growth

The Wall Street Journal Surveyed Economists Who Concluded That "President Donald Trump Has Had Generally Positive Effects On U.S. Economic Growth." "Economists surveyed by The Wall Street Journal say President Donald Trump has had generally positive effects on U.S. economic growth, hiring and the performance of the stock market during his first year in office." (Ben Leubsdorf, "Economists Credit Trump As Tailwind For U.S. Growth, Hiring And Stocks," The Wall Street Journal , 1/11/18)

Economic Forecasters Believe "Mr. Trump's Election Deserves At Least Some Credit For The Economy's Recent Strength." "More broadly, most forecasters surveyed by the Journal suggested Mr. Trump's election deserves at least some credit for the economy's recent strength." (Ben Leubsdorf, "Economists Credit Trump As Tailwind For U.S. Growth, Hiring And Stocks," The Wall Street Journal , 1/11/18)

The "Majority" Of Economists Believe President Trump's Policies And Actions Have Been Positive For GDP Growth. " Asked to rate Mr. Trump's policies and actions to date, a majority of economists said he had been somewhat or strongly positive for job creation, gross domestic product growth and the stock market. Most also said he had been either neutral or positive for the country's long-term growth trajectory, while his influence on financial stability was seen as largely neutral." (Ben Leubsdorf, "Economists Credit Trump As Tailwind For U.S. Growth, Hiring And Stocks," The Wall Street Journal , 1/11/18)

Mike Ryan, UBS Wealth Management's Chief Investment Officer For Americas Said President Trump "Deserves Praise For His Pro-Growth Policies." "Swiss bank UBS said Monday that President Donald Trump deserves praise for his pro-growth policies. Those efforts in making the U.S. a more business-friendly economy, which include the recently passed tax reform, are often under-appreciated, said Mike Ryan, UBS Wealth Management's chief investment officer for Americas. But the president has 'changed the perception of what's possible in Washington,' he said at the bank's client gathering in Singapore." (Yen Nee Lee, "Trump Earns 'High Marks' From UBS For His Economic Policies," CNBC , 1/15/18)


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