Our favorite four-letter word, the one we shout regularly to the rooftops, is J-O-B-S, because employment growth creates prosperity and security for more Americans. The good news on this front deserves a shout-out: Nine years into an economic recovery and 15 months into the Trump administration, the U.S. economy continues to expand and add jobs.
The unemployment rate is now 3.9 percent for all Americans, the lowest level since 2000, while the jobless rate for black workers is 6.6 percent, the lowest figure since record-keeping began in the early 1970s. Yes, record-low joblessness for the black population, and for Latinos, a 4.8 percent rate that ties their record low. Both still are higher than the 3.6 percent rate for whites.
There’s much to lament in the inequality of opportunity for African-Americans in particular. Yet there is also clear evidence that the longer this era of economic expansion continues, the greater number of people benefit. Think back to late 2010, in the wake of the Great Recession, when the overall jobless rate approached 10 percent; it was above 16 percent for blacks.
Statistics are easy to cite and, in this case, to applaud. But what exactly is happening, and how to keep it going? Economists are less helpful once they point out the country has added jobs for 91 consecutive months since October 2010, the longest stretch of job growth on record. Experts can try to predict the future, but they are no better than the rest of us at nailing it.
Our view is that the more confidence employers feel in their prospects, the more people they will hire. President Donald Trump has given employers several good reasons to believe in themselves. One is tax reform. Another is his focus on reducing regulatory red tape; in response they’re investing in their businesses. Companies are hiring, but they also are betting on themselves by plowing money into plants and equipment.
The most important takeaway: Momentum and confidence are keys to this robust cycle of growth. As more people work and spend, businesses experience growing demand and anticipate more, which drives their investment and hiring.
The next step in this cycle should be more wage growth. Maybe you’ve noticed that bosses aren’t handing out raises the way they might, given an unemployment rate below 4 percent: Competition for workers should create faster-rising pay. In the construction business, for example, wages are growing as employers run short of job applicants. “The marketplace has eaten up all the individual talent and we’re all trying to poach each other,” one St. Louis contractor told the Wall Street Journal. We hope that’s a harbinger for the rest of the American workforce.
FROM AN EDITORIAL IN THE CHICAGO TRIBUNE