The unemployment rate is at its lowest mark in 49 years, and workers are bringing home larger paychecks.
The good news is that the jobs market just continues to boom.
The federal government’s latest jobs report shows the national unemployment rate is 3.7 percent, the lowest in almost a half-century.
When unemployment numbers get down that low, employers find themselves competing for relatively scarce workers. That’s why there is more good news.
The scarcity of workers is driving up wages at both the high and low ends of the employment picture.
A Labor Department survey of hourly wages shows pay was up 2.8 percent in September compared to a year earlier. The Wall Street Journal reports that “workers with less than a high school diploma saw their wages grow almost 6 percent, and younger workers’ pay grew almost 3 percent.”
Unemployment numbers have been dropping since the end of the Great Recession in 2009. But while the end of the recession was welcome, the recovery was slow — around 2 percent a year.
Now the economy is growing at a rate of about 3 percent a year. Pessimists suggest it will fall back to 2 percent, while optimists predict the economy will continue to expand.
Time will tell. But the current expansion demonstrates one thing beyond a show of a doubt.
Economic growth is necessary for prosperity, and encouraging growth should be at the top of the priority list — both in the U.S., but especially in Illinois.
More people working means more people paying taxes. More people paying taxes means fewer tax dollars being expended on social services programs aimed at lower-income individuals and families.
As a wise man once said, the best welfare program ever invented is a full-time job.
Modern job statistics show that unemployment rates of 4 percent or less are rare.
The jobless rate got as low as 2.5 percent in 1953. Unemployment was less than 4 percent for four consecutive years in the 1960s, a frothy economy that generated inflation and rising interests and, ultimately, led to a recession. The unemployment rate got down to 4 percent in 2000, just before the “dot.com” bubble burst on the stock market.
Anyone remember “stagflation,” a period of both high unemployment and high inflation in the mid-1970s? President Ronald Reagan and Federal Reserve Board Chairman Paul Volcker ultimately used a high interest rate policy to stifle inflation, leading to the economic books that occurred during the Reagan administration.
The point is, of course, that one good set of economic conditions (low unemployment) can lead to unpleasant side effects (an increase in price inflation).
Although events have proved they are far from clairvoyant, Federal Reserve officials are optimistic about the future. They project the unemployment rate will fall to 3.5 percent in 2019 and stay below 4 percent through 2021.
They also are confident that inflation will remain subdued, although federal deficit spending and the oppressive national debt will pose a severe problem if interest rates continue to creep up.
The booming economy has become a subject of considerable dispute in the face of the Nov. 6 elections.
Republicans argue the economy has been strengthened by the Trump administration policies aimed at reducing regulation, putting more money in taxpayers’ pockets and encouraging business investments.
Democrats say the economy is on a temporary “sugar high” as a consequence of tax cuts that will increase the federal deficit.
Whatever the cause, the economy remains strong. That’s unadulterated good news for anyone who wants a job or is looking for a new job.