There's one remarkable trend in the jobs numbers that few people are noticing

  • Trump’s view of US job numbers has changed now that he’s in office and wants credit
  • One remarkable trend in US employment has been the stability of monthly gains
  • Weak wages, low inflation suggest things could still get a lot better

Donald Trump was quick to take credit for a solid July employment report, despite having cast doubt on the veracity of US economic data when it happened to point to strength under former President Barack Obama

The president took to his preferred medium, Twitter, to sing his own praises:

However, as my colleague Bob Bryan noted, the job market under Trump looks very much like it did under Obama.

Indeed, one remarkable trend of the recent economic recovery, which is on track to be the longest but also weakest expansion on record, has been the incredibly steady pace of job-market gains, which once fluctuated much more drastically from month to month.

“To our mind what is truly remarkable is the stability of this jobs growth, not solely its headline strength,” said Rick Rieder, BlackRock’s chief investment officer, in a statement following the employment report.

“Not only is the persistence of this hiring incredible, but the simultaneous evolution and growth of a more service-oriented economy was once again on display with today’s numbers, with service jobs making up 88% of July new jobs, close to in-line with the five year average.” 

The US economy added a net 209,000 jobs in July, while unemployment rate matched a 16-year low of 4.3%. “To put that data into context, since 1970, or for virtually the past 50 years, the U.S. economy has had less than a 4.3% unemployment rate for only 4.0% of the time, with virtually all of that taking place between 1999 and 2001, so this underscores the strength of the current labour market recovery,” Rieder said.

“The stability of hiring during this cycle has been nothing short of remarkable. It is not just that the system has created 16.8 million jobs since 2010, during a period of rapid implementation of automation and job-replacement software, but the stability and sustainability of this job recovery is truly historic,” Rieder argues. 

Still, many economists say the headline jobless rate masks weak wage growth and low inflation, reflecting underemployment and low labour force participation that continue to plague the job market.

That softness has made Federal Reserve officials reluctant to continue raising interest rates, with most investors not expecting another increase until December. In the meantime, the Fed is expected to announced the timing of its plans to begin shrinking a $US4.5 billion balance sheet in September. 

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