The U.S. Bureau of Labor Statistics released its April employment report this morning, showing continued robust growth in the job market with 263,000 jobs added in April. The official unemployment rate is now 3.6%, the lowest it has been since 1969.
Notably, wages were up 3.2% from a year ago. With inflation remaining tame, real buying power is up.
Employment numbers were revised for February and March as well, showing that employment increased by 16,000 more than previously reported.
Cooling from recent trends, manufacturing employment has flattened in the past two months, adding 4,000 jobs since February. In the 12-month period leading up to February, manufacturers added an average of 22,000 every month, a pace last seen in 1995, 24 years ago.
Comparing the first 28 months of employment data under President Trump to the last 28 months of President Obama’s time in office shows the following in four key areas of the economy.
There are three interesting takeaways from this comparison.
First, manufacturing employment has grown at more triple the pace under Trump than it did in a comparable time under Obama.
Second, government jobs—federal, state, and local—are growing at half the rate under Trump.
Third, overall employment gains under Obama remain incrementally higher, but the pace of employment growth under Trump is constrained by a smaller pool of available workers. This last factor, a tightening labor market, is likely one significant contributor to recent wage gains.
The other contributor to wage gains, and a more important one if those gains aren’t to be erased by future increases in inflation, is improved productivity. American workers boosted their efficiency by the most since 2010. Economists agree that productivity gains are typically stronger in the first phases of an economic recovery. The fact that productivity is rising some 10 years after the end of the Great Recession indicates that the ongoing expansion may have legs.
The Tax Cuts and Jobs Act of 2017, with its reduction to America’s globally high corporate tax rate, combined with regulatory relief, is encouraging business to invest in productivity-improving capital. This has the potential to extend the recovery, as well the recent wage gains.