Economy: The best jobs market in years
Unemployment in the U.S. right now “is about as low as it gets,” said Mark Whitehouse in Bloomberg.com. Propelled by a record 92 consecutive months of job growth, the U.S. unemployment rate sank to 3.8 percent in May, its lowest level since April 2000; the last time the rate was lower was in 1969. Sectors across the economy contributed to the 223,000 added jobs last month, from manufacturing to health care to retail. The unemployment rate for college graduates fell to just 2 percent, and to only 3.9 percent for those with a high school diploma. Joblessness among African-Americans tumbled from 6.6 percent to a record-low 5.9 percent. And for the first time ever, the number of job openings now exceeds the number of unemployed Americans. The only question from this month’s report is “whether there are enough synonyms for ‘good,’” said Neil Irwin in NYTimes.com. Even persistently lackluster wage growth may finally be rebounding: Average earnings are up 2.7 percent year over year, slightly faster than inflation. Clearly, “the economy is in a sweet spot.”
“President Trump’s tax-reform and deregulation agenda appears to be working,” said The Wall Street Journal in an editorial. Employers are adding jobs and raising wages, and that’s encouraging “workers who are often on the edges of the economy” to come off the sidelines. Notably, the number of people who have been jobless for 27 weeks or more has fallen by 476,000 over the past year. We just hope that a trade war doesn’t blow this impressive progress. It’s natural for President Trump to want to claim responsibility for the “roaring” economy, said Robert Samuelson in The Washington Post. “When the economy does well, presidents of both parties routinely brag about the results.” But the true impact of his tax cuts, regulation rollbacks, and tariffs “won’t be clear for years.” What’s really “powering the economy is the economy.” Its forward march is less the product of any partisan policy than it is the steady growth of purchasing power and the restoration of consumer confidence.
“Before you get too excited, some perspective,” said Paul Davidson in USA Today. The labor force participation rate—the percentage of Americans working or who have actively looked for work in the past month—is 62.7 percent. In 2000, the last time unemployment was this low, the participation rate was 67 percent. Our next challenge, then, is to reintegrate the many Americans ages 25 to 54 who remain outside the workforce, particularly because of the opioid crisis. The economy of 2000 was also completely different. Back then, GDP grew at a robust 4.1 percent and the federal budget was in surplus. In comparison, the U.S. economy grew 2.3 percent in 2017 and our budget deficit is likely to hit $1 trillion next year. That’s why if you suggested to most Americans that the economy’s as healthy as it was back in 2000, “they’d probably laugh in your face,” said Jeff Spross in TheWeek.com. Inequality is worse, wage growth is slower, and more people are working as independent contractors, giving employers “more leverage to drive down pay and cut benefits.” The headline numbers look great right now, but compared with 18 years ago, “3.8 percent unemployment just ain’t what it used to be.” ■