WASHINGTON / AP
The first US jobs report to be released since Donald Trump became president will reveal whether growing confidence among businesses fueled an accelerated pace of hiring in January.
Economists remain watchful. They have forecast that the government will report that employers added a solid if unspectacular 175,000 jobs, according to data provider FactSet. Thatâ€™s roughly in line with last yearâ€™s average monthly gain of about 185,000.
The unemployment rate for January is expected to have remained a low 4.7 percent. Many economists think average pay rose at a healthy clip last month and might even top the year-over-year gain of 2.9 percent in December, which was the sharpest such increase in seven years. One likely contributor was a wave of minimum wage increases that took effect in 19 states last month. Januaryâ€™s jobs figures reflect hiring that occurred mainly before Trump was inaugurated on Jan. 20. Still, it will be the first employment report to be released with Trump occupying the White House, and he seems sure to take a close interest in it.
As a candidate, Trump frequently argued that the governmentâ€™s jobs data exaggerated the health of the economy. He called the unemployment rate a â€œhoaxâ€ and said it declined after the recession under President Barack Obama mainly because many Americans stopped working or looking for work.
The biggest factor in that trend has been widespread retirements by the vast generation of baby boomers. Measures of business sentiment indicate that many employers have adopted a more positive outlook since Trumpâ€™s election victory in November. The presidentâ€™s promised tax cuts, deregulation and infrastructure spending have increased optimism that the economyâ€™s sluggish pace of 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 Boardâ€™s consumer confidence index jumped to a 15-year high in December before dipping slightly last month. The Federal Reserve has taken notice. It inserted a reference to the improved consumer and business outlook in a statement it issued after its policymakers met this week. The Fed left its key interest rate unchanged but struck a slightly more upbeat tone about the economy.
Mark Vitner, senior economist at Wells Fargo, said a robust jobs report Friday could make it more likely that the Fed will resume raising rates as soon as March, when it will next meet. In December, the Fed increased its benchmark rate for the first time since December 2015, when it raised it after keeping it at a record low for seven years.
â€œWeâ€™re 180 degrees from where we were 12 months ago,â€ Vitner said. At that time, the Fed left rates alone as markets were plummeting over fears of a sharp economic slowdown in China. Worries about deflation also weighed on the minds of global investors, and by early summer the United Kingdom had voted to leave the European Union, thereby further destabilizing markets.