For the US, it’s jobs, jobs, jobs! (Just don’t mention wages)

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Image: Reuters/Kevin Lamarque
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Most of the latest US jobs report was undoubtedly good. US employers added 313,000 jobs in February, the biggest monthly increase since July 2016, according to the latest data from businesses and government agencies collected by the Labor Department. The report published today (March 9) also revised up the figure for January to 239,000. This year is far outpacing 2017, when the monthly average was 171,000.

The unemployment rate is still at a 17-year low of 4.1% and the labor-force participation rate rose. The other survey in the report, the household survey, showed employment rose by 785,000. Big, promising numbers!

Still, with the US economy basically at full employment, wage growth is the more critical indicator. In February, the pace slowed to 2.6% from a year ago, while the previous month’s figure was also revised down. Wages are still stubbornly sluggish, and bets that inflation is on the rise, in part because of the specter of higher salaries, now look overstated.

Meanwhile, the Trump administration is focusing on job creation with tax cuts, plans for spending booms, and trade tariffs. It remains to be seen if these measures will be effective or will simply overheat the economy. To really help US workers, the administration might want to shift its focus to measures that will increase wages and not just inflation. During the course of Donald Trump’s presidency, wage growth adjusted for inflation has drifted down to zero.