More Bump from Trump
The Trump trade isn’t dead yet. While the wheels of legislation turn slowly in Washington, the real economy continues to send encouraging signals about the potential for robust growth. And workers are enjoying higher wages. The National Federation of Independent Business report on hiring at small firms, due out later today, will show an average seasonally adjusted increase of 0.16 workers per firm. NFIB Chief Economist William Dunkelberg calls this “a solid showing.”
The report contains more good news for workers at small businesses. Not only are more of them employed, but they’re making more money. Mr. Dunkelberg writes in a draft of today’s release: “The net percent of owners reporting that they raised worker compensation remained at the highest levels observed since when 64.7 percent of the adult population was working (compared to about 60 percent today after being stuck in the 58 percent range from 2009 to 2014). Owners then and now are increasing compensation to attract and/or hold critical employees.”
Let’s hope that this demand from employers pulls more discouraged Americans back into the workforce. Small businesses will be needing them, according to another NFIB finding. A seasonally adjusted net 16% of small businesses plan to create new jobs, “up 1 point and a very strong reading,” writes Mr. Dunkelberg.
Based on these encouraging data, Mr. Dunkelberg expects an increase of more than 200,000 jobs when the U.S. Department of Labor issues its March employment report for the whole economy on Friday morning.
This is solid but not spectacular job growth. Such a monthly reading was cause for celebration during the dreary Obama era, and the “secular stagnation” crowd figures this is about as good as it gets. But it’s not. While today’s NFIB report is encouraging, it’s also a reminder that if Mr. Trump and U.S. workers want Reagan-style growth, the economy still needs Reagan-style tax cuts.