- Friday’s jobs report came in stronger than expected, with the best wage growth since 2009.
- Republicans are jumping all over the report, using it as evidence that the economy is humming ahead of Tuesday’s midterm elections.
Friday’s jobs report just gave President Donald Trump and Republicans a little extra ammunition heading into the home stretch of the midterm election season.
The report was strong across the board. The addition of 250,000 jobs in October – well above economists’ expectations of 200,000 – also came with the strongest wage growth since April 2009, with average hourly earnings increasing at a 3.1% pace year over year.
Republicans pointed to the strong wage and job growth numbers as evidence that the party’s tax law and economic policies had helped grow the economy.
“While Democrats again this week pledged to raise taxes on hardworking Americans and take more money away from Main Street businesses, Republicans know our workers deserve a pro-growth economy like the one we’re seeing that truly works for them,” said Rep. Kevin Brady, the chair of the House Ways and Means Committee who helped write the tax law.
The jobs report is a helpful data point for Republicans given that their tax law, the Tax Cuts and Jobs Act, has not polled well. Most Americans surveyed in a recent GOP-commissioned poll said they thought its benefits were disproportionately tilted toward wealthier Americans and corporations. But the jobs number could strengthen Republicans’ case that benefits have made their way to more Americans.
Rep. Karen Handel, who is running for reelection in Georgia’s 6th District, gave an example of the party’s possible pitch.
“My opponent called the tax cuts a ‘scam,'” Handel tweeted. “She wants to repeal them and raise your taxes. Yet month after month, the economic news gets better. Today’s jobs report far exceeded projections!”
The race for Handel’s seat, which she won in a closely followed special election in 2017, is rated “lean Republican” by The Cook Political Report.
The GOP is expected to cheer the strong numbers. Even Jason Furman, the chair of the Council of Economic Advisers under President Barack Obama, acknowledged that some of the growth was most likely attributable to the tax law.
“The 213k jobs per month in 2018 (to date) is a marked upshift from the 182K last year,” Furman tweeted. “The combination of tax cuts and spending increases have probably added about 50K jobs per month this year. Fiscal stimulus does work, at least temporarily.”
While the pickup from 2017 is significant, the long-term trend of job growth remains relatively stable:
- Average monthly job growth for 2017 and 2018 is 196,000, slightly below the average monthly gain of 211,000 for 2015 and 2016.
- Additionally, the 213,000-per-month pace would be stronger than 2016 and 2017 but below the average monthly job gains in both 2014 and 2015.
As Furman noted, it’s unclear whether the stimulus will produce a long-term trend of job growth. Most economists on Wall Street and elsewhere think the tax cuts will add to economic growth and job gains in the short term but expect the effects to fade eventually.
But the short-term boost may be enough to give Republicans a tailwind heading into the midterms.
Trump tweeted a little more than an hour after Friday’s release: “Wow! The U.S. added 250,000 Jobs in October – and this was despite the hurricanes. Unemployment at 3.7%. Wages UP! These are incredible numbers. Keep it going, Vote Republican!”
- Trump’s bewildering new tax cut proposal is ‘the height of cynicism’ and an admission the GOP tax law failed politically
- The US will issue over $US1.3 trillion in new debt in 2018, the highest amount since the depths of the recession
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