By Paul J. Lim
April 7, 2017

On Wednesday, President Trump sent out an Instagram link to a news report claiming that the job market was looking good in March, and included a triumphant message: JOBS, JOBS, JOBS!

That was two days before Trump’s own Labor Department issued its official employment report for March, which painted a far different picture. According to government figures, the economy only created 98,000 new jobs last month.

That was a far cry from the 180,000 that economists had been expecting, and marked the worst month for job creation in 10 months — when there were real fears about the health of the global economy.

Some economists cited strange weather patterns as a potential explanation for the bad miss. For instance, unusually warm weather in January and February may have boosted hiring in January and February, which meant that companies may not have been looking to hire as much in March, when several major storms struck the Midwest and East Coast.

But the Labor Department actually went back to its January and February job counts and reduced its earlier estimates for job creation in the first two months of the year by 38,000.

“This report only adds to concerns that the U.S. economy is slowing,” said Chris Gaffney, president of world markets at EverBank.

Weren’t economists predicting that the economy would accelerate on pro-growth strategies being pushed by the Trump administration?

Yes, but today’s jobs report shows that there’s a disconnect between what economists think is going to happen and what’s actually taking place in the market.

Here are three signs of possible trouble:

1) Look at the signals the bond market has been sending.

Bond investors are highly attuned to changes in economic growth, because rapid growth often leads to inflation, which eats away at modest bond returns. Yet since mid March, bond investors have been buying up long-term Treasuries, a sign that the fixed income market does not think the economy is heating up.

That buying pushed the yield on the 10-year Treasury note down from 2.62% on March 13 to 2.32% on Friday.

“Whether or not weather-related weakness hit job creation, the Treasury market sees slower growth and a slower build up in inflation…,” said Quincy Krosby, market strategist at Prudential Financial.

2) Look at the retail sector.

No amount of stimulus from Washington can quickly turn around the troubled retail sector, which is “struggling with overcapacity in the industry and the consumer’s shift to online purchases,” said Mark Hamrick, senior economic analyst at Bankrate.com.

He points out that “30,000 retail jobs were lost in March and job cut announcements have been piling up since the beginning of the year, meaning more pain for retail workers looms in the months ahead.

Among the major chains that have announced store closings this year are: J.C. Penney, Macy’s, Sears, Kmart, Payless ShoeSource, and the Limited.

3) Look at the stock market.

Is Friday’s report a sign that companies aren’t as confident that Trump can juice the economy as he promised? “Perhaps people are becoming disenchanted with the lack of results from the new administration,” said Tom Siomades, head of Hartford Funds Investment Consulting Group.

If that’s true, that would dovetail with signs on Wall Street that investors aren’t as confident as they once were that Trump will be able to deliver massive tax cuts.

Business Insider cited a Jefferies analyst report which studied the performance of stocks based on their tax rates.

If investors truly believed that corporate taxes were coming down meaningfully this year, you would assume that shares of companies that pay the highest tax rates would do well in anticipation of their lower tax burden. But the report showed that the market’s lowest-tax stocks have outperformed the broad market since Trump’s election in November.

Perhaps employers are just as concerned as investors.

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