Trump boasts of 'blowout' 303,000 jobs report, leading economists to puzzle over his math

Show Caption Hide Caption Trump calls for new focus on hiring fmr prisoners President Donald Trump says he wants to follow up on criminal justice reform with efforts that help federal inmates find jobs after they leave prison. (April 1)

Economists were scratching their heads after President Trump tweeted about a “blowout” 303,000 jobs that the economy added in October, more than twice the 128,000 that the Bureau of Labor Statistics reported early Friday.

"Wow, a blowout JOBS number just out, adjusted for revisions and the General Motors strike, 303,000," Trump tweeted. "This is far greater than expectations. USA ROCKS!"

Chris Lu, the former deputy secretary of labor for President Barack Obama, tweeted that Trump had "reached a new low and is making up fake numbers."

Even though Trump's comments about the jobs numbers included caveats about revisions and the GM strike, economists were still puzzling over his math.

“What the president said today is not tethered to any empirical reality,” said Joe Brusuelas, chief economist of RSM.

Wow, a blowout JOBS number just out, adjusted for revisions and the General Motors strike, 303,000. This is far greater than expectations. USA ROCKS! — Donald J. Trump (@realDonaldTrump) November 1, 2019

For one thing, Trump's number throws in the 95,000 in upward revisions of job gains in August and September. Economist Michael Feroli of JPMorgan Chase says he typically doesn’t consider prior months’ revisions as part of the latest monthly tally. But Jim O'Sullivan, chief U.S. economist of High Frequency Economics, says it's not unreasonable to include the upgrade since it does add to total U.S. payrolls.

Keep in mind, however, that when Trump has touted past strong jobs reports, he hasn’t highlighted any downward revisions to previous months.

The GM strike, meanwhile, idled 46,000 workers, BLS has said. BLS said Friday that motor vehicles and parts manufacturing lost 42,000 workers in October, suggesting it would have added 4,000 if not for the strike.

But wait. Economists expected the motor vehicle industry to lose another 10,000 to 12,000 jobs because of the strike’s ripple effect on auto suppliers, pushing the GM strike toll to as much as 58,000 jobs. Tomas Philipson, who chairs the Council of Economic Advisers, reckoned an even bigger impact on auto suppliers that nudged the GM effect to 60,000.

Healthy hiring: Economy added solid 128,000 jobs in October despite GM strike and loss of census workers

As a result, the White House is saying: But for the strike, total U.S. employment would have been 60,000 higher, so let’s add that to the October count.

Worth revisiting:



When Obama was president, Trump called the #JobsReport "phony," "fake" and "hoax"



After taking office, Trump said: "They may have been phony in the past, but it’s very real now"



He's now reached a new low and is making up fake numbers https://t.co/L6PSldUktO — Chris Lu (@ChrisLu44) November 1, 2019

Yet O’Sullivan says it doesn’t appear there was any noticeable effect of the strike on auto suppliers. Philipson’s math indicates the auto industry would have added about 20,000 jobs if not for the strike. But over the past six months, the sector has lost an average 2,000 jobs a month and didn’t gain more than 2,000 in any single month, O’Sullivan notes.

During an interview on Fox Business Network, Larry Kudlow, head of the National Economic Council, also cited the October layoffs of 20,000 temporary workers for the 2020 census. That, he said, should be added to the hypothetical scenario that doesn’t include GM or census effects.

So if we add the 95,000 jobs from prior months’ revisions, the 60,000 GM-related jobs and the 20,000 census jobs to the 128,000 total, voila – we get 303,000.

“That is a blowout number,” Kudlow said. “We've seen nothing like it.”

Yet aside from the accuracy of the GM figure and the validity of wrapping in previous months' revisions, there’s this: The White House didn’t subtract the 20,000 temporary census workers that inflated previous jobs reports, so why add them for October? And administration officials likely won’t take out the 46,000 – or 60,000 – auto jobs from the November tally when those employees will be back at work.

But Feroli suggests giving Trump a break.

“I think the 303,000 is debatable,” he says. “But I wouldn’t dismiss it out of hand.”

Added O’Sullivan, “I think there are more blatant things you can call him out on.”

Market surprises: Stocks escaped a scary October and set records. So what’s next for your 401(k) in 2019?