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Economists: Job growth steady but not stellar

Hard to ascribe changes to any one president, given size of economy

Judging by President Trump’s Twitter account, it would be easy to believe the jobs situation and the U.S. economy have never been better.

“Excellent job numbers just released—and I have only just begun,” he tweeted about the July jobs report.

Well, not so fast, said Robert Dauffenbach, a professor at the University of Oklahoma and director of OU’s Center for Economic and Management Research.

The nation is on pace to add about 2.4 million jobs this year, Dauffenbach said, which is good, but not an increase over the nation’s recent past year-over-year job growth.

In 2016 the nation added an average of 194,000 jobs per month for the first seven months of the year, while 2017 has seen an average of 184,000 per month for the same period.

Additionally, both 2016 and 2017 are down slightly from the peak jobs gains of 2014 when the nation added as many as 300,000 some months, making for a total gain of nearly 3 million jobs for the year.

Put another way, 2017 is on track to add the fewest jobs in seven years, but that doesn’t mean it’s bad news, Dauffenbach said.

“I’d say these numbers are OK,” Dauffenbach said. “I’d say they’re on an even keel.”

Dauffenbach credits the unprecedented job growth of 2014 and 2015 to what he describes as the nation’s fortunate recovery from the Great Recession of 2008, and he said former President Obama deserves some credit for pulling the nation out of that morass. However, he points out, presidents don’t typically influence the economy much.

“It’s very hard to ascribe our economic situation to a president,” Dauffenbach said. “We have an $18 trillion-plus economy, and it doesn’t move around much. And when it does, it moves slowly.”

Politicians love to take credit for good news and they love to blame somebody else for bad news, said Kent Gardner, chief economist at Rochester’s Center for Governmental Research Inc.

“That’s true at the local level, the state level and the national level. It has always been so,” Gardner said. “The truth of the matter is, is that decisions that are made, particularly by presidents, on the job situation take a long time to manifest themselves.

“It’s not that presidential decisions aren’t important, but the U.S. economy is a very, very large ship and steering it with the size rudder that a president has is really hard,” Gardner explained.

Trump has not been in office long enough to influence overall job numbers at this point, he added.

“Those numbers, where the economy is right now, were baked way back in the Obama administration,” Gardner said.

Anirban Basu, an economist and CEO of Sage Policy Group in Baltimore, was also skeptical about the president’s impact on the economy.

“How much credit should Donald Trump get for economic performance today? I would say almost none,” he said. “And that’s not an indictment of him. Any president who had been in office for the neighborhood of eight months would receive little credit or blame for the performance of the economy.”

Basu believes the president could have legitimately claimed some credit for the economy if he had been successful in passing tax reform or an infrastructure or stimulus package, but so far, he said, the facts are that the Trump administration has done little legislatively.

“Now there has been a surge in business confidence, which has been at multiyear highs based on various surveys,” Basu said. “But as confidence has risen, my very strong perception in looking at the data is that most CEOs are adopting a wait-and-see attitude. They might be thrilled by the idea of corporate tax reform, but they want to see it first before they respond from a business decision-making perspective, so we really have not seen a tremendous pickup in business spending.”

What we have seen is a continuation of the consumer-led economic recovery, now in its ninth year, which is creating jobs at a healthy pace in the manufacturing, trade and health care industries, Basu said.

Across New York, however, the manufacturing sector continues to bleed jobs, as evidenced by the state Department of Labor’s most recent jobs report, released last week. From August 2016 to August 2017, the manufacturing sector lost 18,500 jobs. Over-the-year sector losses were concentrated primarily in durable goods, especially computers and electronic products, the Department of Labor reported.

A recent report from state Comptroller Thomas DiNapoli analyzing job data from 2011 through 2016 suggests key measures of New York’s labor force reveal both positive signs and reasons for concern.

In 2016, both the statewide 4.8 percent unemployment rate and the total count of unemployed individuals were the lowest in nine years. However, declining unemployment does not necessarily mean that more people are working, DiNapoli wrote in the report.

“A shrinking labor force can reflect both employment and unemployment declining at the same time,” the report states, noting that from 2011 through 2016 that was the case in five of the state’s 10 regional labor markets. “Factors driving such labor force declines could include migration of workers to other regions within New York or outside the state, as well as individuals dropping out of the workforce.”

In Rochester, according to the Department of Labor’s monthly payroll survey, some 1,500 nonfarm jobs were shed in August, a continuing trend in the region. Rochester was the only metro area statewide to lose nonfarm jobs from August 2016 to August 2017.

Gardner cautioned, however, that those numbers may be unduly influenced by a few firms. Up until a few years ago the monthly survey was conducted locally; now it is done in Washington but reported by the state Department of Labor. And in the whole Finger Lakes region just 100 firms are represented in the monthly survey, which can create anomalies.

“So the month-to-month numbers are really twitchy,” Gardner said. “Long term they do a great job. But month-to-month, who knows?”

Jennifer Norris writes for BridgeTower Media. Includes reporting by staff writer Velvet Spicer.

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