The United States economy is basically healthy.þþThat is the simplest, most important thing to take away from new jobs numbers released Friday morning, four days before the presidential election. These numbers affirm that Americans were probably right to focus on other things during this election. The United States still has plenty of problems and economic challenges. But they are more of the long-building variety than the get-us-out-of-this-slump variety.þþThe unemployment rate edged down to 4.9 percent in October, continuing a remarkably stable run (it has been either 4.9 percent or 5 percent for 12 of the last 13 months). Employers added 161,000 jobs, broadly consistent with the pattern over the last year; job creation estimates for September were revised upward.þþThe biggest and most pleasant surprise in these numbers is evidence that workers’ wages are rising faster than they have through seven years of expansion. Average hourly earnings for private-sector workers rose 0.4 percent, and are up 2.8 percent over the last year. It suggests that the many anecdotal reports that employers were needing to increase pay to get workers are more than just anecdotes.þþIt is also true that inflation is starting to edge up, which means that in terms of buying power wages aren’t really rising any faster than they were a few months ago. But if you think of inflation trends lately as being driven mostly by swings in energy prices, you’re left with the good news that American workers seem to have the leverage to demand higher pay from their employers. That’s what you’d expect from more than a year at a 5 percent unemployment rate, but wage gains have been slow in coming.þþThere is less good news in the report as well. The October numbers partly reversed progress that was evident in the September report on the number of Americans who were part of the labor force. A whopping 444,000 more people said they were either working or looking for work in September than August, but that number fell by 195,000 in October. For the truth of the matter, it’s probably best to average the two months and assume that higher wages are indeed coaxing people into the labor force, but at a more gradual pace than the September report suggested.þþWhere does that leave a proper understanding of the state of the United States economy on the eve of an election?þþThe current economic expansion may be the most maligned in history. Among the complaints: It has been too weak, too slow, too uneven; it has been accompanied by people dropping out of the labor force; it hasn’t brought meaningful income gains; it is driven entirely by the sugar high of monetary stimulus from the Federal Reserve.þþAnd these statements aren’t wrong! It really has been painfully slow, particularly given the depth of the 2008-2009 recession from which the United States has been recovering these last seven years.þþBut it’s worth pausing to look at what has been achieved. Some 95.1 percent of Americans who tell survey-takers that they want a job are working. And they are finally starting to get the bigger paychecks they have long hungered for. It took a long time getting here, but the problems in the economy don’t have much to do with recessions and recoveries anymore. They’re about deeper questions of how best to improve the nation’s long-term economic potential.þþThe next president will take office with a sound economy. The decision voters face is over which candidate’s long-term vision they find most compelling for building upon that.
Source: NY Times
