This Friday we get the US employment data. We should see a pickup in payroll growth after two months of decline. Partly, this will have been due to a bounce back in GM-strike related employment. The report will probably assure the Fed and add to their conviction that keeping rates on hold for the foreseeable future is the right option.
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This Friday we get the US employment data. We should see a pickup in payroll growth after two months of decline. Partly, this will have been due to a bounce back in GM-strike related employment. The report will probably assure the Fed and add to their conviction that keeping rates on hold for the foreseeable future is the right option.
Leaving aside the monthly ups and downs in payroll growth, it’s also worth looking at broader trends in US employment. And one way to do this is by examining which sectors of the economy have experienced the biggest percentage gains in payroll employment since President Trump was elected in late 2016.
On that metric, we find that the mining, construction, and transport sectors have seen the largest gains (Chart 1). The US shale gas boom, fuelled partly by easy credit conditions, has likely contributed to the gains in mining. But President Trump’s deregulation may also have made a difference. The trouble with mining is that it makes up less than one percent of overall US employment. Construction and transport together make up around 10% of employment. So they are much more meaningful.
At the other of the spectrum we find stagnant employment growth in the retail, information, and government sectors. For retail and information, this is undoubtedly due to new technology replacing the need to hire people.
Overall, the trends in employment tell us more about the impact of technology on the labour market as much as about President Trump’s policies. Certain jobs like construction and transportation are harder to automate (for now), while others like retail and IT are easier.
Chart 1: Mining, Construction and Transport Have Seen Major Payroll Growth Under Trump
Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.
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