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Trump inherits a healthy job market, with solid hiring
WASHINGTON (AP) — President Donald Trump has inherited a healthy-looking job market from his predecessor, with the U.S. economy registering a burst of hiring in January and an influx of Americans looking for work.
U.S. employers added 227,000 jobs last month, the Labor Department said Friday . That’s the biggest gain since September, and it exceeded last year’s monthly average of 187,000.
Unemployment ticked up to a still-low 4.8 percent from 4.7 percent in December. But it rose for an encouraging reason: More Americans started looking for work last month.
The unemployment rate counts only those people who are actually trying to find a job. All told, more than a half-million Americans began looking in January, and the vast majority landed a job.
That suggests the job market could grow more quickly than expected in the coming months.
“You could have a faster pace of job growth, because you have more people out there looking for work,” said Michelle Meyer, chief U.S. economist at Bank of America Merrill Lynch.
Investors appeared upbeat about the jobs report. The Dow Jones industrial average rose 187 points to lift the index back above 20,000.
Yet some of the economy’s softness remains: Average hourly wages – a weak spot since the Great Recession ended 7½ years ago – barely rose last month. And the number of people working part time who would prefer full-time work climbed.
The January figures reflect hiring that occurred mostly before Trump was inaugurated on Jan. 20. Still, it was the first employment report to be released with Trump in the White House.
The president expressed satisfaction with the jobs report and suggested that the sharp hiring gain reflected confidence among employers about his administration.
“Great spirit in the country right now,” Trump said as he began a meeting at the White House with corporate CEOs and other business leaders. “We’re very happy about that.”
As a candidate, Trump frequently argued that the government’s jobs data exaggerated the health of the economy. He called the unemployment rate a “hoax” and said it declined after the recession under President Barack Obama mainly because many Americans stopped working or looking for work.
Friday’s figures also represent a final report card on Obama. The economy added jobs for a record 76 straight months, or nearly 6½ years, and gained 11.5 million jobs during his two terms in office.
That puts Obama fourth in job-creation among the 12 presidents who have served since World War II, according to Hamilton Place Strategies, a consulting firm.
Many employers appear to have adopted a more positive outlook since Trump’s election. His promise of tax cuts, deregulation and infrastructure spending has increased their confidence that the economy’s sluggish growth will pick up.
The National Federation of Independent Business said its measure of small-business optimism soared 38 points in December to its highest level since 2004. And the Conference Board’s consumer confidence index jumped to a 15-year high in December before dipping slightly last month.
Economists said optimism may have played some role in lifting hiring last month.
“I think there is some anticipatory hiring going on,” said Sung Won Sohn, an economics professor at California State University. “The only way I can really explain that is optimism related to the election.”
Robert Mayfield, 69, owns eight Dairy Queen franchises and an independent restaurant in Austin, Texas. He plans to open a ninth DQ that will employ about 30 people and said he is much more bullish about the economy since the election.
“It’s surprising how much your horizons change when you feel good about the economy,” he said. “Instead of hunkering down, we’re looking to expand.”
Some of January’s hiring probably reflects weather and other seasonal quirks. Construction companies, for example, added 36,000 jobs, the most since March. That figure might have been boosted by unseasonably warm weather in the Northeast.
And retailers generated 46,000 more jobs, the sharpest monthly gain in nearly a year. But that number probably reflected imperfections in the government’s seasonal adjustment process, which tries to account for the pre-holiday hiring boom and the post-holiday layoffs.