The news on the economic front continues to be excellent. The Labor Department’s February jobs number came in at 313,000, smashing all forecasts. In addition, jobs numbers for both December and January were upgraded. The number of those employed surged in February by 785,000.
The sectors where jobs increased the most are significant, too:
Construction jobs led the way, with 61,000 new positions, followed by retail and professional and business services (50,000 apiece), manufacturing (31,000) and financial activities (28,000). Health care added 19,000 while mining saw 9,000 new jobs.
The Dow closed today up 440 points. The market obviously has gotten over the minor vapors caused by President Trump’s announcement that he intended to impose tariffs on steel and aluminum imports.
I don’t believe we have commented on Trump’s steel and aluminum tariff orders since they were issued yesterday. At risk of immodesty, I think my reaction to Trump’s initial announcement–On Tariffs, Hold the Hysteria–has been borne out. Trump excluded Canada and Mexico from his orders, referring such discussions to the NAFTA process. He also left room for any other country to negotiate its own exclusion from the order.
My guess is that Trump will use this procedure to redress trade wrongs that he thinks are being committed by countries like China as the price of resuming tariff-free shipments of steel and aluminum products to the U.S. And there are, indeed, grievances to be addressed, after eight years of an administration that was uninterested in looking out for American interests. Deals will be made, and America will benefit. How much will remain of the tariffs at the end of this process, and how much benefit will accrue to the U.S. steel industry, remains to be seen. I suspect Trump sees this as a win-win: if he can make a deal with a country like China that brings consideration in exchange for tariff relief, great. If not, so be it: the tariff will remain in place, and to that extent, the domestic steel or aluminum industry will benefit.
I find this approach hard to criticize, and apparently the stock market does, too.
UPDATE: This tweet by President Trump adds support to my view of his approach to trade:
Spoke to PM @TurnbullMalcolm of Australia. He is committed to having a very fair and reciprocal military and trade relationship. Working very quickly on a security agreement so we don’t have to impose steel or aluminum tariffs on our ally, the great nation of Australia!
— Donald J. Trump (@realDonaldTrump) March 9, 2018