Taking a page out of the standard playbook for new executives, President Trump began his tenure promising transformation within the first 100 days of office. While most new executives can hope only to sketch out a transformation plan within their first 100 days, they will nevertheless try for some early and visible wins to inspire confidence in their effectiveness as leaders and convert the skeptics.
As we approach Day 100 of the new administration, few of Trump’s attempted early wins or transformative efforts have involved intervening in the job market. That’s probably just as well. On one hand it would be unwise to tamper with a system that is running soundly, albeit not so much so that everyone is benefiting equitably.
And on the other, there is little the President could feasibly do anyway, as the fundamentals supporting the favorable economic conditions are now solidly established after several years of post-recession floundering.
Job growth taking a Spring Break
As the economy enters its second quarter of 2017, a few discrepancies remain about just how solid those fundamentals are. ADP reported that 263,000 new jobs were added in March, a figure subsequently tempered by a much lower Labor Department total of 98,000, which also included a downward revision of 38,000 from February’s totals.
Bad weather and precipitously poor performance in the retail sector explained a large part of lower than expected Labor Department figures, both areas to which ADP measurements tend to be less sensitive. Also blamed was a shrinking labor supply due to the economy approaching full employment.
On track for another good year for jobseekers
Offsetting this discrepancy was a stack of good news telling a consistent story of a robust job market continuing to grow at a modest, though respectable rate. Averaged over the first quarter, the economy continues to create jobs at a rate of about 180,000 per month. As a result, the unemployment rate decreased to 4.5 percent, the lowest level since May 2007.
New claims for state unemployment benefits decreased by over 10 percent to a total of 234,000, the largest decrease in nearly two years, and near its lowest amount in almost 44 years. The number of workers losing their jobs has receded to 2006 levels, while the number leaving their jobs has surpassed 2006 levels.
That means that more so than at any other time in the last decade, both those who wish to keep their jobs and those who want to trade up are better able to do so.
Workers continue to see steadily increasing paychecks, although wage growth suffered a slight decrease in the first quarter as compared to the last quarter in 2016. The year-over-year increase in average hourly wages continues to hold steady at 2.7 percent.
Finally, despite the apparent slowdown in jobs and wage growth, both the manufacturing and service sectors remain solidly in growth mode for 2017, exhibiting indicators of continued business investment to meet increasing consumer sentiment and high season business activity.
Where the real 100-day transformation in the job market is likely to happen
For all the positive job market news shimmering on the surface, there lies underneath the stubborn fact that millions of workers are still shut out from participating in the workforce. Precisely how many millions is hotly debated, but the anguish is becoming increasingly both conspicuous and acute.
If we are to see any transformation in the job market within the first 100 days (or for that matter the next 100), it is going to be in the narrative of the job market. And that will be framed by two big questions: can the economy continue to grow, and can we get enough sidelined workers back into full-time work?
Both questions are likely to include a redefining of unemployment more broadly as non-employment, which includes discouraged and marginally attached workers, along with those forced into part-time work.
Consequently, more attention is likely to be paid to measures of workforce participation, which remain relatively high, yet well below pre-recession levels. For example, the overall labor force participation rose slightly in February and March to 63 percent, along with the employment-to-population ratio inching up to 60.1 percent. Yet both are at least 3 percentage points below pre-recession levels, and represent an overall loss of approximately 7 to 8 million once productive workers from the workforce.
Any transformation in the job market will first have to recognize the existence of millions of people who up to now have been virtually out of sight. And that alone would be a real transformation.