The new year started with accelerating economic growth, but the momentum is likely to have slowed in March.
The jobs report to be released Friday by the Bureau of Labor Statistics (BLS) follows a solid two-month economic boom at the start of 2017. In February alone, 236,500 nonfarm payroll jobs were added to the economy. But Wall Street economists predict a mere 175,000 new jobs in March.
“I have no reason to believe that the census expectations are not going to be within a reasonable range of the truth,” said Elsie Gould, senior economist at the Economic Policy Institute, a non-partisan think tank in Washington, D.C.
Gould said the rapid pace of job growth promised by President Trump — some 25 million new jobs over the next 10 years — would be an impossible task.
An unseasonably warm winter across the nation added 58,000 new construction jobs in February — the industry’s strongest gains in 10 years, which may have contributed to the higher than usual number in last two months. But temperatures turned in March. And in an industry that is weather-dependent, the spurt in construction jobs may be short lived.
“In January and February, we had mild weather,” said David Sloan, senior economist at 4CAST-RGE, a global economic and financial analysis firm. “But that’s only temporary. The numbers should rebound in March.”
Yet, the ADP National Employment Report, a private-employment report, had a more optimistic outlook in its Wednesday release with an increase of 263,000 new jobs last month.
But the data released in the BLS nonfarm payrolls report include both private and public jobs — and often have a very different set of numbers.
“Historically, we have been reluctant to view the ADP data as a reliable barometer of the private payroll data because of significant slippage between the monthly changes in the ADP and BLS employment series,” Ward McCarthy, chief financial economist for Jefferies LLC, a global investment bank, said in an email.
Some of the jobs that are expected to be on the rise in March’s report include service industry jobs. Earlier this week UPS announced that it would add 6,000 service and delivery jobs by the end of 2018. Amazon has also recently announced that they will be adding 30,000 new part-time jobs in the coming year.
Other industries that will be affected depend largely on new legislation set forth by the Trump Administration, such as immigration and trade policies.
“If the Administration really does effectively close down the borders, then that will really put pressure on certain industries,” said Ken Simonson, chief economists at Associated General Contractors of America in Virginia. “That could drag down economic growth.”
Areas that have been dwindling include the private goods-producing sector, such as coal mining, manufacturing and retail. Coal mining jobs, despite President Trump’s continued promises to revive the industry, may be permanently curtailed.
“Coal mining jobs have been doomed by technology,” Simonson said.
Retail jobs are also on the decline as malls across America are dying and many stores are being forced to close up shop. “This drumbeat of bad news from the retail sector is seemingly never-ending,” Simonson said.
The overall economy, however, remains in good shape, with a current 4.7% unemployment rate — a measure in which many economists call “full employment,” or where almost everyone is employed.
McCarthy anticipates unemployment will creep up by only one-tenth to 4.8%.
“We expect the weakness to be a temporary downside divergence from the ongoing solid trend,” McCarthy said.
How much of a healthy economy can be attributed to Trump, who has only completed two full months in his new gig at the time of the report, is still unclear. Yet, as confidence levels continue at unprecedented heights, one thing is sure.
“It’s almost a certainty that any administration takes credit for good news,” Simonson.