Final jobs report under Obama shows slow, steady growth

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December’s job report was indicative of the economic growth under the Obama administration: slow and steady with employment gains in health care and education. Photo by Jonathan Bachman/Reuters

That’s a wrap. December’s jobs report is the last for the Obama administration, and it ends on a high (if also predictable) note: The U.S. economy added 156,000 jobs in December, and the unemployment rate changed little at 4.7 percent.

The number of jobs added in October and November were revised down 7,000 and up 26,000 respectively, for a total 19,000 more jobs than previously reported.

Wages also rose, with average hourly earnings gaining 10 cents in December after a 2 cent decrease in November. Over the year, wages have increased 2.9 percent. As economist Elise Gould noted, despite room for improvement, that growth is the fastest so far in the recovery.

So overall, how was 2016 for the economy?

The U.S. economy added nearly 2.2 million jobs — on average, 180,000 jobs a month. The unemployment rate fell from 5 percent to 4.7 percent, hitting a post-recession low of 4.6 percent in November. The number of involuntary part-time workers fell by 459,000, and the number of discouraged workers fell by 237,000. Our Solman Scale U7, a more comprehensive measure of un- and underemployment, hit a low of 11.3 percent down from 12 percent a year earlier.

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And as economist Justin Wolfers points out, December was the 75th month of straight job growth.

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All of this begs the question: Was it really the sour state of the U.S. economy that put President-elect Donald Trump in the White House?

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“Wage growth has been the Achilles heel of [Obama’s] tenure,” said Douglas Holtz-Eakin of the conservative American Action Forum. Throughout the recession and subsequent recovery, roughly “90 percent of the people were employed the entire time, and they did not get a raise.” The wage growth in 2016 was too little, too late.

University of Michigan economist Betsey Stevenson points to the hit in manufacturing — a loss of 45,000 jobs in 2016 — to explain the frustration with the economy.

While manufacturing gained 17,000 jobs in December (perhaps in reaction to a Trump presidency), “Manufacturing jobs never really came back,” said economist Mark J. Perry of the conservative American Enterprise Institute. Some of the economic anxiety felt in 2016 comes from a “misplaced expectation that all of these manufacturing jobs are going to come back,” but, because of gains in productivity and technology, that’s highly unlikely, he added.

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The gendered characteristics of the manufacturing industry are telling, says economist Kate Bahn of the progressive Center for American Progress. “We are losing male-dominated jobs,” — in coal, construction and manufacturing — “and we’re gaining feminine-dominated jobs” — in health care and education, she said.

“Male jobs we see as more important to the economy,” said Bahn. “We don’t value feminine jobs the same.” One of the successes of the economic populist message, she added, was how economic anxiety was linked to a loss of masculinity, as blue-collar men were faced with unemployment or “feminine” jobs.

So while the economy has recovered, some people have yet to reap the benefits.

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And the black unemployment rate, while hitting a post-recession low of 7.8 percent in December, is still almost twice that of white unemployment.

On the whole, Bahn notes, December’s jobs report was indicative of the economy under Obama administration with it’s “slow, steady, progressive tightening of the labor market.” The smoothness of the recovery, she added, is a “testament to progressive economic policies.”

And what can the next president expect?

“He’s inheriting an economy that’s on solid ground, a stock market that’s at an all time high, and the mood of the country has turned in a positive direction,” said Perry.

“Basically we’re back to full employment,” said Holtz-Eakin. Going forward, the question for Trump will be: “Can he generate better productivity growth, and can he generate more wage growth?”

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