Accelerated growth in jobs and wages in October gave President Donald Trump a critical boost in the final days before the midterm elections.
“Wow!” the president tweeted after the Labor Department released the numbers Friday morning. “The U.S. added 250,000 Jobs in October – and this was despite the hurricanes. Unemployment at 3.7%. Wages UP! These are incredible numbers. Keep it going, Vote Republican!”
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The White House couldn’t have asked for a more favorable set of economic numbers to flag in the four days left before the midterms. The report gives Trump an opportunity to argue that the economy, under his leadership, is soaring. And the rapid increase in wages — the largest year-over-year gain since 2009 — could undermine Democrats’ argument that economic gains under Trump have left behind working-class voters.
“It’s definitely a strong signal that workers are finally beginning to see the growing economy reach their paychecks,” said Elise Gould, senior economist for the left-leaning Economic Policy Institute.
One economist cautioned that the Labor Department’s 3.1 percent wage figure, which measures progress over the previous 12 months, could be a statistical fluke caused by Hurricane Harvey last year. Wage growth fell in October 2017 as people returned to work.
“The movement up between September and October is entirely artificial. That’s math,“ said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
But even Shepherdson conceded that evidence is accumulating that the wage stagnation that’s baffled economists throughout the nine-year economic recovery is coming to an end. “Step back from that short-term weather story,” he said, and “the trend in wage growth is inevitably picking up.”
October’s 250,000 new jobs created was a significant improvement on the 118,000 in September. The 3.1 percent increase in wages was up from 2.8 percent in September.
The White House was quick to spike the football, telling reporters in a rare phone briefing that the October numbers exceeded their expectations.
“People who got discouraged by the Great Recession, they’re coming back in droves,” said Kevin Hassett, chair of Trump’s Council of Economic Advisers.
Brisk economic growth under Trump — an obvious talking point for any president — has not been Trump’s principal theme in the final runup to the election. Instead, Trump has focused on a caravan of Central American migrants heading north to the U.S. border; on a constitutionally dubious threat to revoke birthright citizenship; on fomenting trade wars with Canada, Mexico, and China; and on a long-running battle with the Federal Reserve over raising interest rates.
Asked why Trump has minimized the strong economy in his closing midterm arguments, Hassett demurred. “I’ve never had much of a valuable opinion about politics,” he said, “This is a really good news story that’s not necessarily a good political story or a bad political story.“
Evidence that wages are rising is not an entirely unmixed blessing for the White House. That’s because it increases the likelihood that the Federal Reserve will raise rates next month to keep inflation in check. That, in turn, would likely depress the stock market — already turbulent in recent weeks — and prompt more fury from the president.
Democrats pushed back on the jobs report as best they could, noting that the gains under Trump are part of a trend that started under his predecessor.
“Let’s be clear on Republican congressional ads bragging about the economy,” William Spriggs, the AFL-CIO’s chief economist, tweeted. “Trump took office with the unemployment rate already below 5% and falling. The current trend in falling unemployment rates since October 2009 — 9 years ago — is not accelerating.”
Meanwhile, businesses are still struggling to find enough workers to fill open jobs, economists say.
“Even if businesses want to hire workers, they’re not going to be able to find them,” said Mark Zandi, the chief economist for Moody’s Analytics. “At some point it’s going to bite into the job numbers — it’s inevitable.”
The labor force participation rate — the share of people actually looking for a job — edged up slightly but remained close to 63 percent in October, near its lowest level since the 1970s.
“We have a ways to go simply because there are a lot of workers on the sidelines,” said Dan North, chief economist at Euler Hermes North America.
Rebecca Rainey contributed to this report.