FxWirePro: U.S. jobs growth strong; Trump effect wanes

Yesterday, the dollar suffered a heavy blow as the ADP employment disappointed. According to ADP employment report, the US economy added only 158,000 jobs in the month of June, which prompted investors to doubt the resilient of the US economy. However, before we make in affirmative decision or conclusion, we believe that the report needs to evaluated in historical context,

• Simple data crunching from 2003 shows that despite the weak job numbers yesterday, the US economy remains resilient in terms of jobs growth. Chart 1 shows, average monthly changes in the number of new jobs created. So far, in 2017, the US economy has created 218,000 new jobs every month, which is the highest since 2014 and is the second highest in our entire data range beginning 2003.
• The concerns, however, remains in the good-producing sector that includes construction, manufacturing, as well as mining and natural resources. This year, the US economy added 49,000 jobs in this sector on an average per month, which is the highest in our entire data range beginning 2003. Despite this encouraging fact, one must note that after creating 181,000 jobs in this sector in January and in February, US economy created only 31,000 jobs in this sector in the past three months, which indicates that the initial Trump effect might be waning. Moreover, in 2008 and 2009, during the ‘Great Recession,’ US economy lost more goods-producing sector jobs that it created in total in the past seven and half years.