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Sunday, June 3, 2018

The May jobs report is great news for everyone — except Democrats running for office



John W. Schoen | @johnwschoen
Published 1:05 PM ET Fri, 1 June 201

Friday's monthly employment report was great news for anyone looking for a job in America – unless you happen to be a Democrat running for Congress.
That's because voters who are employed are historically more likely to favor incumbents than those who are out of work.
With the jobless rate now down to 3.8 percent, Democrats in 435 House districts and 35 Senate races face a major challenge as they try to unseat Republican majorities in both chambers.


David Paul Morris | Bloomberg | Getty Images

A worker spot welds a metal door during production at the Metal Manufacturing Co. facility in Sacramento, California.

Friday's monthly employment report was great news for anyone looking for a job in America – unless you happen to be a Democrat running for Congress.

Among the many contentious topics swirling around this year's campaign, none is more important than the perennial issue of employment. Voters who are employed are historically more likely to favor incumbents than those who are out of work.

That poses a major challenge for Democrats in 435 House districts and 35 Senate races who are looking to unseat Republican majorities in both chambers.



This jobs report is 'bountiful,' says Cramer 10:19 AM ET Fri, 1 June 2018 | 03:30

The economy added roughly 223,000 net new jobs in May, pushing the jobless rate a tick lower to 3.8 percent, an 18-year low.

President Donald Trump was uncharacteristically silent on Twitter about Friday's strong jobs data, aside from a controversial early morning tweet seeming to predict strong growth ahead of the 8:30 a.m. release. But White House economic advisor Larry Kudlow offered an upbeat forecast.

"Business is coming alive," he told CNBC. "This could go on for a whole bunch more years, in my judgement."

Of course, the historic run of employment gains has been underway since the Great Recession ended, well before Republicans took control of Congress and Trump moved into the White House.

But with the U.S. economy now approaching its 10th year of recovery, the overall unemployment rate has fallen to levels rarely seen in the historical data. Last month, the official "headline" jobless rate fell to the lowest level since the end of the '90s Internet boom, which lasted a decade. The last time it was lower was in December 1969, at the tail end of a nearly nine-year boom that ended in 1970.

And the jobless rate may go lower still.

"The labor market is tightening rapidly and declines in the unemployment rate are likely to continue, but at a slower pace," Ben Herzon," an analyst IHS Markit, wrote in a research note.

That would make it harder for Democrats to argue that voters need a change in Washington, at least in terms of the most critical pocketbook issue.

Most troubling for Democrats is that the biggest job gainers have been groups that have historically suffered from stubbornly high levels of unemployment, including younger workers, black workers and so-called marginally attached workers, whose employment is tracked by the BLS with the so-called U-6 rate. That measure includes part-time workers who want a full-time job and people who want to work but have given up looking and aren't in the official count of the labor force.




As employers seek to fill jobs from a shrinking pool of unemployed workers, the U-6 rate is now at a 17-year low. Last month, it fell to 7.6 percent, a drop of two tenths percent.

And among blacks — whom Trump famously claimed had "nothing to lose" by voting for him in the 2016 election — the jobless rate last month fell to 5.9 percent, a full percentage point drop in just two months. That puts the jobless rate for blacks more than a full point lower than the last trough in April 2000 when it hit 7.0 percent.

Trump also has focused heavily on job creation for manufacturing and mining workers, who have been among the hardest hit in the latest economic recovery.

While the overall growth in employment has been roughly comparable among states that voted for Trump and those who supported former Secretary of State Hillary Clinton, the uptick in manufacturing jobs has been strongest in "red" states.