Why Great Economic News for American Workers Should Continue

US job growth surges with largest 
wage growth since 2009

New York Post Editorial Board: Friday brought more great economic news: higher-than-expected jobs growth in August, as well as a solid rise in wages — all with unemployment remaining at record lows. Manufacturing activity just hit its highest level since May 2004, and consumer confidence is at an 18-year high. And there’s good reason to think it’ll keep up.

The wage-growth number was the big one: The month saw average hourly wages jump 0.4 percentage points on top of a 0.3 rise in July, making August’s annual wage hike a solid 2.9 percent — the largest since June 2009.

That means the unemployment rate of 3.9 percent conceals even better news: All these stats point to a tight labor market, which means more people are also surely working more hours every week, with folks having been stuck working part-time moving to full-time, and other workers drawing overtime pay.

Thus, the Labor Department’s broader measure of unemployment (which includes those who’d given up working, frustrated part-timers and so on) dropped to 7.4 percent, its lowest level since April 2001.

Can the good news keep coming? The US economy is years into recovery, long past the point when most expansions falter.

The difference is that growth was so slow in the Obama years — when liberal economists told America that the “New Normal” was the best anyone could expect. But Team Trump didn’t buy that claim, insisting that a break with Obama-era policies could bring the boom times that mean higher pay and strong job growth.

President Trump delivered that break with a major rollback of regulations and a landmark tax cut, and the US economy is responding — following modest 2.2 percent annual GDP growth in the first quarter with 4.2 percent second-quarter growth.

And the Atlanta Fed now predicts 5 percent growth in the third quarter — putting the economy on the track that candidate Trump promised, even as Democrats scoffed.

The president’s tariffs and tough trade talk still have Wall Street nervous, but it looks like things are working out on NAFTA even as tensions with Europe ease.

Yes, tight labor markets will likely prompt the Fed to keep hiking interest rates — but even that would be a step toward pre-Obama normalcy. The super-low rates of recent years have caused all manner of economic distortions, including slow investment as Corporate America kept massive cash reserves.

Good times never last forever, but this economy’s prospects still look plenty bright.
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This Editorial Board article was noted by The White House.

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