By PATRICIA COHENDEC
Departing occupants of the White House rarely hand off an improving economy to a successor from the opposing party.
When Barack Obama was waiting in the wings after the 2008 presidential election, for example, the economy was in a severe downward spiral: Employers reported cutting 533,000 jobs that November, the biggest monthly loss in a generation. But according to the government’s report on Friday, Donald J. Trump can expect to inherit an economy that has added private sector jobs for 80 months, put another 178,000 people on payrolls last month and pushed the unemployment rate down to 4.6 percent today from 4.9 percent the previous month. Wage growth, though slower, is still running ahead of inflation, and consumers are expressing the highest levels of confidence in nearly a decade.
The Federal Reserve is confident enough about the economy’s underlying strength that it is now set to raise the benchmark interest rate when it meets later this month.
The jobless rate for November, the lowest since August 2007, “is a testimony to how strong employment growth has been,” said Jim O’Sullivan, chief United States economist at High Frequency Economics. Jason Furman, now chairman of President Obama’s Council of Economic Advisers, remembers the transition eight years ago, when he was crammed into his office with a circle of key officials as the latest jobs numbers from the Labor Department landed.
“It was an utterly terrifying time, the likes of which none of us had ever seen in our lifetimes,” Mr. Furman recalled. Fearing that “the economy was following the same trajectory that it did at the beginning of the Great Depression,” everyone was focused on how to “rapidly slow the bleeding and figure out how to get the economy growing again.”
By contrast, Mr. Furman said, “the economy today is healthy and it’s improving.”
For all the improvements, tens of millions of Americans understandably feel that the recovery has passed them by. Those without skills are relegated to low-paying positions without steady schedules, security and benefits. Breadwinners who once held well-compensated manufacturing jobs are angry about being forced to settle for lower-wage service jobs — or no jobs at all.
Profound anxiety, particularly among the white working class, about the ability to reach or comfortably remain in the middle class is one of the factors that helped propel Mr. Trump to the White House.
Pockets of weakness also surfaced in the latest jobs report, which showed that more people dropped out of the labor force last month than joined it. Manufacturing jobs declined further, and there are still plenty of part-time workers who would rather be full time. And while the official jobless rate for high school graduates fell to 4.9 percent, it is more than twice the rate for college graduates.
“There is a bifurcation of the work force,” Jonas Prising, chairman and chief executive of the ManpowerGroup, one of the largest recruiters in the United States. People who are able to take advantage of advances in technology, globalization and other shifts that favor those with the right skills for the nation’s advanced services are thriving.
The Labor Picture in November
UNEMPLOYMENT RATE
SHARE OF
POPULATION
1-MONTH
CHANGE
1-YEAR
CHANGE
NOV.
5.0
%
Employed
59.7
%
Unch.
+
0.3
pts.
Labor force
(workers and
unemployed)
62.8
–
–
0.1
pts.
+
0.2
4.8
4.6
‘HIDDEN’
UNEMPLOYMENT
4.6%
1-MONTH
CHANGE
1-YEAR
CHANGE
4.4
In millions
NOV.
D
J
F
M
A
M
J
J
A
S
O
N
Working part
time, but want
full-time work
5.7
–
–
3.7
%
–
6.8
%
UNEMPLOYMENT
DEMOGRAPHICS
1-MONTH
CHANGE
1-YEAR
CHANGE
NOV.
People who
currently want
a job§
5.5
†
–
1.6
%
+
3.7
pts.
White
4.2
%
–
–
0.1
pts.
–
0.2
Black
8.1
–
0.5
–
1.3
Hispanic
5.7
Unch.
–
0.7
UNEMPLOYMENT BY
EDUCATION LEVEL
1-MONTH
CHANGE
1-YEAR
CHANGE
†
†
†
Asian
3.0
–
0.3
–
0.9
NOV.
Teenagers (16-19)
15.2
–
0.4
–
0.4
Less than
High school
7.9
%
+
0.6
pts.
+
1.1
pts.
DURATION OF
UNEMPLOYMENT
High school
4.9
–
0.6
–
0.5
1-MONTH
CHANGE
1-YEAR
CHANGE
Some college
3.9
+
0.1
–
0.5
In weeks
NOV.
Bachelor’s or higher
2.3
–
0.3
–
0.2
Average
26.3
–
3.3
%
–
5.7
%
Median
10.1
–
1.0
–
5.6
TYPE OF WORK
1-MONTH
CHANGE
1-YEAR
CHANGE
In millions
NOV.
Nonfarm payroll,
12-month change
EMPLOYMENT
Nonfarm
145.1
+
0.1
%
+
2.1
%
+2
%
Goods
0.1
19.6
+
+
0.1
Services
125.5
+
0.1
+
1.8
Agriculture
2.4
+
5.0
+
0.6
+1
AVERAGE WEEKLY EARNINGS
Rank-and-file
workers
1-MONTH
CHANGE
1-YEAR
CHANGE
NOV.
0
O
D
J
F
M
A
M
J
J
A
S
N
$890.62
–
0.1
%
%
+
2.2
%
The deal that Mr. Trump made with the heating and cooling company Carrier this week to keep 1,000 manufacturing jobs from moving to Mexico from Indiana is emblematic of the kind of actions he said he would take as president to help blue-collar workers.
But there are limits to the power of persuasion. Betsey Stevenson, an economist at the University of Michigan and a former economic adviser to Mr. Obama, said that manufacturing, while still a driving force in the economy, employed fewer and fewer people. More than 80 percent of jobs are now in the service industry, Ms. Stevenson said, and Mr. Trump should be thinking more about how to match workers with those jobs.
“The economy is in a great place, and his biggest challenge is continuing that,” she said.
Some economists worry that the Federal Reserve is too focused on fears of future inflation and that it should hold off on any increase in rates until conditions have improved further. “There’s no reason to pre-emptively slow the economy down, given that we’re starting from less than full employment,” said Elise Gould, an economist at the left-leaning Economic Policy Institute in Washington. “Right now, the priority should be keeping the economy on track and moving it forward.”
Such pleas are unlikely to win the day. At last month’s meeting of the Federal Reserve, members concluded that the case for an increase in the benchmark rate had been “strengthened,” and that they would be ready to move “so long as incoming data provided some further evidence of continued progress.”
Many employers are having a harder time finding and retaining workers.
“Recruiting is a tough issue right now in skilled and semiskilled industries,” said Robert A. Funk, chairman and chief executive of Express Employment Professionals, a staffing agency based in Oklahoma City. He mentioned a particular need for workers in accounting, information technology, call centers, warehousing and office and professional services.
Mr. Funk said employers often complained about being unable to find employees with a strong work ethic who met the minimum requirements. “Drug screening is a real challenge in many parts of the country,” he said. “Only 30 percent can pass a drug screen in the state of Washington,” where marijuana is legal.
At the same time, employers have been reluctant to raise wages to a level that might lure back sidelined workers. The result has been that the country has 5.5 million job openings, a near-record level, but still relatively anemic labor force participation rates.
“The challenge out there now is finding workers and keeping the workers you have,” said Steve Rick, chief economist at CUNA Mutual Group. Those shortages, whatever the cause, are likely to push wages higher next year, he said.
“People are feeling good not only about their current income but their future income,” Mr. Rick said.
Whatever the economy’s current failings, Mark J. Rozell, a political scientist at George Mason University in Virginia, said it was nonetheless better than the ones most incoming presidents have faced in the last half-century. “Trump can be thankful that his predecessor is handing him a fairly strong situation,” Mr. Rozell said, “especially when compared to many past party transfers of power.”
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