It looks like tomorrow’s unemployment report could be the best of the New Year. That’s because ADP's February private payroll estimate is 298,000, a yuge number. This would make tomorrow’s jobs report the biggest gain since October 2015 and one of the very largest of this recovery from what was the Great Recession, let us not forget. ADP isn't always followed closely but its call last month for outsized growth in January payrolls did prove correct with January’s 227,000 payroll growth, says Econoday.
This level of order growth was last exceeded in August 2009 and follows two prior 60 readings as tracked by the green line of the graph, said Econoday. This is rare strength. Among regional reports, the most closely watched one, the Philly Fed, has been making similar headlines with its new orders index surging 12 points to a 38 level that was last witnessed way back in 1987.
But such anecdotal evidence may not be enough to boost overall GDP growth, as the stronger dollar is holding down exports. Data on goods trade show a major widening in the deficit, to $69.2 billion during January. Foreign buyers showed little interest in U.S. goods in the month as exports of capital goods fell sharply and pulled total exports down 0.3 percent to $126 billion as tracked on the graph, said Econoday.
U.S. products more expensive to foreign buyers and lift imports by making foreign products less expensive to U.S. buyers.
Is this all about the ‘Trump’ enthusiasm effect, which to date has nothing to show for it but executive orders and Tweet storms? He has historically low approval ratings for a new president (at least among Democrats and Independents), and has been unable to start his term with a burst of substantial legislation, as Barack Obama did, and as I said last week.
So the jobs surge may be temporary, unless the Trump administration begins to focus on jobs legislation, rather than attacks on their perceived enemies. That is still the question, with so many intelligence scandals and conflicts of interest surrounding him. President Trump has to first prove he can lead his own party.
Harlan Green © 2017
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