Will Perceptions Help Trump to a Second Term?
Perceptions matter. People make decisions, even life-altering decisions, based on what they perceive as likely to happen. To the extent that public policy affects such decisions, the perception of likely policy change can affect behavior even before the change happens — even if it ends up never happening.
Something like that seems to be happening in America — and around the world — in the two months since Donald Trump was inaugurated as president. People are making decisions based on perceptions of how he might change the country's direction.
Take the economy. The numbers in the jobs report for February, Trump's first full month in office, showing an increase of 235,000 jobs, are not wildly out of line with some monthly reports in recent years.
In contrast to the years of the Obama stimulus program, when the bulk of new jobs came in the public sector, it appears that the increase here is in the private sector. Moody's Analytics says there were 298,000 new private sector jobs in February, far more than the 189,000 it expected.
Construction jobs were up 58,000, private educational services jobs up 29,000, manufacturing jobs up 28,000. This suggests that lots of employers, small as well as large, are taking the plunge and creating new jobs.
Can I prove that they're doing so because of perceptions that regulations and taxes will be decreased by the Trump administration? No, and I'm not sure any economist's statistical model could either. But that sure looks like what's happening.
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