America is nearing full employment. So why is GDP growth so lousy?

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Another month, another "expectation-smashing jobs report," said Bourree Lam at The Atlantic​. The U.S. economy added a whopping 255,000 jobs in July, far exceeding the 179,000 predicted by economists. After a "fantastic" jobs report in June, hiring was once again strong across almost every major industry, and average hourly wages posted impressive gains. Although the unemployment rate remained unchanged at 4.9 percent, it was for the very good reason that more people were looking for work. "Yay, jobs!" said Mark Whitehouse in Bloomberg. "Now if only the economy would catch up." U.S. GDP grew an anemic 1 percent in the first half of the year, the weakest start in five years. And since the end of the recession, our average economic growth has been a disappointing 2.1 percent a year — the weakest pace of any expansion since 1949. Strong hiring and economic growth generally move in concert. But even as we are nearing full employment, the economy can't seem to catch fire. What gives?

"It increasingly looks as if something fundamental is broken in the global growth machine," said Neil Irwin at The New York Times. "For reasons that aren't fully understood, economic output is growing much slower than job creation" — and it just may be the new normal. Economic growth in advanced nations has been weaker for the past 15 years than at any time in the post–World War II era. In the U.S., GDP per person grew an average of 2.2 percent annually from 1947 through 2000, but only 0.9 percent since 2001. In Western Europe and Japan, it has been even worse. One reason is a dramatic decline in productivity growth. No one is quite clear why, but we are getting lower productivity gains from technological advances than initially predicted, which means less wealth is generated from people's work than expected. Another factor is the extraordinary stimulus that central banks deployed after the global financial crisis. They've largely "kept their feet on the economic accelerator," but their efforts are becoming less and less effective. The result: weak supply and weak demand "pushing each other in a vicious circle." And over time, that means "a radically slower improvement in living standards."

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For many American companies, the financial crisis still casts a long shadow, said Ylan Mui at The Washington Post. In the years since the recession ended, many businesses "have been willing to hire but loath to invest." This year has been no different: Corporate spending on everything from computers to new buildings declined sharply in the three months through June. Executives prefer to pour money into investor-pleasing maneuvers like stock buybacks, or sit on cash for fear of another downturn. What will this all mean come Nov. 8? asked Ben Casselman at FiveThirtyEight. Donald Trump has staked his campaign on the idea that the U.S. economy is "stuck in a deep hole." But there is evidence that "the recovery is starting to reach some of the groups that have struggled most in recent years." The unemployment rate for people with only a high school diploma is down to 5 percent from more than 10 percent during the recession, and the recent uptick in wages may only now be starting to be felt. As far as the job market is concerned, "the economy will probably look pretty good on Election Day." But the next resident of the White House will have to face the puzzle of low overall growth.