Americans heard no shortage of grim economic predictions during the 2016 presidential campaign. But the latest report from the US Department of Labor tells a different story.
On Thursday, the Labor Department reported that 234,000 Americans sought jobless aid in the week ending January 14th. The average claims for the four-week period ending on the 14th – which economists view as a less volatile measure – was 246,750.
Jobless claims serve as an index for layoffs in the economy, and these numbers are the lowest of their kind in over 40 years. Better yet, economists expect hiring to stay strong in 2017.
"The economy is doing great, whichever way you look at it," Harm Bandholz, the chief U.S. economist at UniCredit Research, told Reuters. "The labor market is close to full employment and the housing market continues to heal. Trump is inheriting a strong economy."
In addition to the past four weeks' jobless claim numbers – the lowest since November 1973 – other key economic indicators are also strong. New home construction starts rose 4.9 percent last year. Employers added 156,000 nonfarm jobs in December, and 2016 ended on a 4.7 percent unemployment rate – the lowest in a decade, according to the Wall Street Journal.
It’s not all good news, however. The labor force participation rate, which tracks people over age 16 who are working or looking for work, was 62.7 percent in December, versus 66.4 percent in December 2006.
"In part this has to do with a shift in the labor market that makes it much harder to earn a living wage without post-secondary education," The Christian Science Monitor's Lonnie Shekhtman wrote earlier this month. "Some economists worry that among those who are not returning to the workforce are Americans who don't have the skills and training for the jobs that employers say they are struggling to fill."
Many political and economic observers see the discontent of those working-class voters, particularly those without college degrees, as a major factor in President-elect Donald Trump's victory. Workers in that demographic may feel left out of recent months' job growth, with hiring in manufacturing and mining lagging behind healthcare and other, higher-skilled sectors.
“If you’re in a bifurcated economy ... it’s not broadly growing across the board; it’s spotty,” economist Chris Christopher Jr. told the Monitor last month.
One of Trump’s signature proposals for reviving manufacturing – putting high tariffs on imported goods – makes many economists worried. “Such moves would spark fierce resistance from the business community as well as many in Congress...it could also trigger similar responses from trading partners, putting a further brake on international trade,” Ms. Shekhtman reported in late December.
But absent these developments, economists foresee continued growth in 2017. As reported by the Associated Press, Jim O’Sullivan, the chief U.S. economist at High Frequency Economics, believes that hiring is "more than strong enough to keep the unemployment rate trending down."
This report contains material from Reuters and the Associated Press.