Jobs Report Closes Book on Obama Economy?
The January jobs report released Friday marks the end of Barack Obama’s presidency and an economic legacy tarnished by the steady decline of the nation’s manufacturing base.
America had 12.34 million manufacturing jobs in January, up by about 5,000 the previous month but down by 1.75 percent from January 2009, according to the Bureau of Labor Statistics. Manufacturing jobs are up 5.2 percent since the official end of the recession in June 2009, and the sector has added 888,000 additional jobs since it registered its low point in early 2010.
“The January numbers have closed the book … on Obama’s manufacturing jobs record.”
But Obama fell well short of his 2012 campaign promise to create 1 million manufacturing jobs during his second term. The actual figure was about a third of that goal, 362,000.
“The January numbers have closed the book … on Obama’s manufacturing jobs record,” said Alan Tonelson, an economic policy analyst who closely tracks the sector.
Overall for January, the economy added a better-than-expected 227,000 jobs, with the unemployment rate rising a tick to 4.8 percent as more people entered the labor force. President Donald Trump, meeting with his Economic Advisory Council, hailed the report.
“Great spirit in the country right now. So we’re very happy about that,” he said. “I think that it’s going to continue big league. We’re bringing back jobs. We’re bringing down your taxes. We’re getting rid of your regulations. And I think it’s gonna be some very good times ahead.”
Some observers have attributed a steady rise in the stock market since the November election to a “Trump effect,” with investors expressing confidence in the future.
Peter Morici, an economics professor at the University of Maryland, said jobs are the opposite. They are a lagging indicator because employers are reluctant to increase payroll.
“People are very, very conservative about hiring people,” he said.
So while 227,000 is a healthy number, it will take months before Trump truly owns the economy, Morici said.
As to how long that takes, Morici said, it depends on the pace of Trump’s progress on his economic agenda. Personal tax cuts take a while to make an impact, he said. Corporate tax cuts take even longer to filter down into the day-to-day economy, he added.
“It depends on what he does and when he does it,” he said.
Morici pointed to Trump’s desire to spend billions of dollars on road, bridge, rail, and other infrastructure projects. He said the details matter. If it is structured like the stimulus program that Obama pushed through in his first year in office, it will have a similarly disappointing result, he said.
The federal government tends not to spend money efficiently, Morici said. The fastest way to juice the economy through infrastructure, he said, would be to give money directly to mayors and local officials, along with a tight limit to spend it. He said local officials know the needs of their communities better than anyone else.
Tonelson, who writes an economy blog called RealityChek, said one of the most disappointing legacies of the Obama years has been slow economic growth. He attributed that, in part, to weak productivity growth caused by a lagging manufacturing sector.
At times during the past eight years, economic growth exceeded 4 percent, but it never sustained that pace for more than a quarter or two. Trump has said he wants to see consistent 4-percent growth and create 25 million jobs. That is an ambitious goal, Tonelson said.
“I don’t say that as a pejorative,” he said. “He should be ambitious.”