The February jobs report from the Bureau of Labour Statistics released Friday was strong: 235,000 jobs were added, higher than the 200,000 expected by economists.
It was the first official report of President Donald Trump’s tenure since the survey week for January’s report was done before Inauguration Day.
According to Gary Cohn, the head of Trump’s National Economic Council, there’s no reason to give credit to Trump for the strong report.
During an interview with CNBC, Cohn did say the report was “right exactly where we needed it to be,” but also noted that Trump’s team wasn’t the reason for the beat.
For one thing, Cohn noted, the jobs that have been promised by CEOs meeting with Trump haven’t happened yet.
“Look, there’s clearly a good February as part of the number,” said Cohn. “I’m not going to deny that, but on the other hand when you look at what we’ve been doing here are the White House and all of the CEOs we’ve brought in — whether it be Sprint or Intel — they have promised enormous amounts of jobs and job creation in the United States. Those hirings have not been done yet. Those are future hirings.”
Thus, the beat in the February report according to Cohn is on the back of the recovery from the past 8 years under President Barack Obama.
So we’re still living on the hirings from the normalized economic growth that’s built into the system here,” said Cohn to CNBC. “So When you look at what’s ahead of us and what’s built into the system, we have a huge backlog of hiring we already know about in the normal run rate of the economy and we’re very excited about what’s ahead of us.”
Cohn is right in the sense that the February report is fairly on par with the economic trajectory of the pat few years.
As noted by Politico’s Ben White, the 235,000 gain in February was roughly in line with the past two February’s: 238,000 in 2015 and 237,000 in 2016.
Additionally, the weather could have made the report look even stronger than it would have otherwise. February was the second-warmest in the past 126 years in the US. As Paul Mortimer-Lee, chief economist at BNP Paribas, noted construction jobs boomed by 58,000 in the month, three times the industry’s 12-moth and 24-month averages.
Francois Gourio, a researcher at the Chicago Fed, used his model to estimate that anywhere between 30,000 and 70,000 jobs were added due to the warm weather. (Of note, Chicago went without snow in both January and February for the first time in 146 years.)
Not only that, but wage growth as measured by average hourly earnings is still running below 3% year-over-year, so while certainly improved at 2.8%, it remains below pre-crisis levels.
This may simply be Cohn setting this as the bar for Trump to go on an exceed, as well.
In the end, given the fact that Trump has not gotten any significant legislation through Congress and it is less than two months into his presidency, there probably isn’t much to discern from Friday’s report as it pertains to the impact of Trump on the economy.
Check out Cohn’s comments below via CNBC: