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In his State of the Union, President Trump emphasized U.S. economic growth, arguing that his administration’s policies are driving it. Friday’s jobs report, which was stronger than many analysts had predicted, is partly in line with those assertions. But the overall American economic picture is more nuanced than Trump’s rhetoric. The New York Times’ Jim Tankersley joins Amna Nawaz to discuss.
Today's U.S. jobs report was stronger than many analysts had predicted, and much of it seemed in line with a number of claims President Trump made during his State of the Union address earlier this week, crediting his administration's policies for economic growth.
But some of the president's claims may overstate the current strength of the economy.
Amna Nawaz gets a wider view.
Judy, many of the president's points about strong job growth, wage increases and people returning to the labor market are reflected in today's report, but the bigger picture was more measured, with retail and manufacturing losing jobs. And the assessment of the overall economic situation is more nuanced than the president's rhetoric.
In fact, in some cases, the president's claims are just wrong.
Now, Jim Tankersley covers economics for The New York Times, and he is here to help us sort through it.
Welcome back to the "NewsHour," Jim.
Thank you for having me.
So, let's look at this jobs reports now.
There was some fear that the trade wars, fears of a looming recession could slow things down. Jobs report today, 225,000 jobs added in January, seems like a good number, right?
It's definitely a good number.
It's always good to have a jobs report that beats expectations, which is what we had here. And this is definitely a strong number, enough jobs to keep the pace of job creation going well above what we need and keep the economy kind of at this level, which is great.
It's particularly good, given those fears you mentioned. I don't think we see a recession right now anywhere on the near horizon.
Was this a slowdown, though, or basically keeping up with where jobs growth…
So, this is a little bit of an acceleration above what the trend has been over the last year.
Now, there were some revisions in this data for the last year-plus of jobs, and it looks like the overall pace of growth in that time was a little less rapid than we thought it was. But this beat that pace by more than a little bit.
OK. Good to understand that.
Now, I want to take a look back, while we have you here, because, obviously, this jobs report is coming at the end of a week that began with a lot of the claims the president was making about the economy, hailing the strength of the economy, in the State of the Union address.
We want to break down some of the points he made and get your take on them.
So let's take a listen now to what the president had to say in the State of the Union about jobs and unemployment.
President Donald Trump:
Since my election, we have created seven million new jobs, five million more than government experts projected during the previous administration.
The unemployment rate is the lowest in over half-a-century.
OK, Jim, so seven million new jobs, he says, five million more than was projected, and the unemployment employment rate the lowest in half-a-century. All of those true?
Well, let's — yes, let's start from the last one and move backwards.
The unemployment rate is lower than it's been in half-a-century, absolutely true. Also important to note, though, that it started pretty low. He inherited an unemployment rate of less than 5 percent. Not a lot of presidents in recent years have inherited a rate like that, and been able to continue an expansion.
So the president starts with low rate and has seen it go even lower.
On the job creation front, he's putting a lot of stock there in a 2016 report by the Congressional Budget Office, which thought that job growth was going to slow when sort of the expansion kind of petered out maybe or slipped into a low growth phase.
But it turns out the economy just has more room to run, and with the tax cuts and spending increases that he's signed into law, there was more fiscal stimulus and more room to grow.
So, related to jobs, a lot of the jobs messaging the president does is on manufacturing, right, that there's going to be this blue-collar boom.
Let's take a listen to what he had to say about keeping some of those jobs here, specifically through the factories, he says, have stayed here in the United States. Here's the president.
After losing 60,000 factories under the previous two administrations, America has now gained 12,000 new factories under my administration, with thousands upon thousands of plants and factories being planned or being built.
Tim, what did you think when you heard those numbers?
Well, first off, they're a little bit inflated.
The most recent numbers that we have suggests it is just under 11,000 new manufacturing establishments that have been created under the president's watch. There's a little lag on those numbers. So it may end up being true, but we don't know yet exactly.
But, more importantly, those are mostly small businesses. Like, three-quarters of them have fewer than five employees. So…
Fewer than five?
Fewer than five.
So, it's true those are factories. They're not the kind of factories the president is talking about. These are not like 12,000 brand-new huge auto plants coming back.
And the final thing, of course, is that the previous presidents had to deal with the Great Recession, which killed a lot of factories. So that's a big part of this.
So here's the other point we hear from the president a lot, which is talking about the strength of the stock market, right?
And he points a lot specifically to 401(k)s as a sign of the economy's strength. Take a listen to how he phrased it during the State of the Union.
All of those millions of people with 401(k)s and pensions are doing far better than they have ever done before with increases of 60, 70, 80, 90, and even 100 percent and even more.
First of all, are 401(k)s really growing that fast? And, also, how representative is that about the strength of the economy?
Well, it depends on what's in your 401(k), I guess.
But, look, the stock market is up under the president, the S&P 500, Dow Jones both up about 60 percent since he was elected. That's good. It is not a record. It's not a — like, under Bill Clinton, for example, there was a similar period of time with dramatically faster stock growth than Trump has seen.
So he's overstating that.
Now, it's also true that the bulk of gains in the stock market don't just help sort of people with — average investors. They — in general, about half of Americans are in the stock market, and the value of the stock market tends to be concentrated among the richest Americans, who are — who have the most money to invest.
And most Americans, correct me if I'm wrong, don't even have a 401(k). Is that right?
It's about half of Americans who are sort of in the stock market in one way or another, whether it's through a 401(k) or a pension plan or just owning a share or whatever.
So here's the other thing I want to ask you about, because a lot of people's confidence in the economy is about what they believe to be true, right?
And there are some new numbers to look at. Pew Research recently put out these numbers asking people how they think the president's policies have impacted the economy. It's important to point out, more Americans believe he's had a positive impact on the economy; 44 percent say the economy's better under him; 29 percent say that it is worse.
When you look at those numbers, how do you assess that? Are people's perceptions lining up with reality?
Well, I think, in some funny ways, they are, and, in some funny ways, they're not.
One way that they're not is that the biggest correlation with how you feel about the economy right now is not how are you doing compared to how you were doing before. It's, how do you feel about the president? It's the number one predictor of your economic confidence.
That said, a very important group, political independents, have seen a big upswing in competence in the last few months. And that probably does reflect real hard data or soft data, something like stock market gains data, of people feeling better about things.
And I think that's absolutely good news for the president as he enters his reelection year. And it's reflective of the fact that unemployment is low, wages are growing, not as much as they have in the past, but they're growing. And there are these job gains every month, and that's a good — it's a good thing.
It's a good thing.
And it's a good thing you're here to provide all this nuance for us,
Jim Tankersley of The New York Times, thanks for being here.
Thank you so much.
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