March 2018 Employment Update

Continuing our ongoing coverage of the labor market, the release of the March Employment Situation by the Bureau of Labor Statistics shows that unemployment remains at 4.1% for the fourth month in a row, while the U-6 “underemployment” rate crept down another 0.2%.

Very little has changed since February; while there was a significant drop in the number of marginally attached workers, that number bounces around a lot, so it’s unlikely to mean much on its own.  The underlying story continues to be that the Obama economy finished draining almost all slack out of the job market while Trump got control over the levers of power, and so far he hasn’t done anything to screw it up, but further improvements in employment would be difficult to achieve without dramatically expanding participation by populations such as the elderly, disabled, and students.  However, Trump’s incipient trade wars put this situation in peril. While it’s unlikely that there will be a sudden crash in employment, disruptions as workers transition between sectors could be expected to create in a slow rise in unemployment. In addition, stock market volatility triggered by Trump’s increasingly frequent tweets attacking corporations and trading partners may reflect increasing business uncertainty, which tends to undermine investment and hiring over time.  Tl;dr: As a great military mind once said, “No boom today. Boom tomorrow. There’s always a boom tomorrow.”