Fiscal stimulus works.
The unemployment rate at almost 50-year low of 3.7 percent. Specifically, the latest report showed 250,000 jobs in October to bring our monthly average to 213,000. It was a little less robust 182,000 in 2017.
The good news, though, did not stop there. 25-to-54-year-olds – who should be in. What percentage of people are they looking for? 0.4 percentage points to, yes, another post-2008 peak of 79.7 percent. There's still some "missing workers" out there who we'll have to get off to get off the sidelines if we can keep the recovery going. Especially if there is any risk to pick up, it has recently. It has been increased to 3.1 percent over the past year – which is the first time it has been since 2009 – which is why it is not working right now.
Put it all together, then, and get a picture of an economy that's on it. We're in a virtuous cycle where more people are working out, but because there are many people looking for jobs, those are not enough. It's an economy that's solidly in the Goldilocks zone.
Now, we should not overstate the difference between the 2.5 million jobs the economy is spending on this year and the 2.2 million it added the year before. But it's worth pointing out for a simple reason: It's not what we expect to happen. The lower the unemployment rate gets, after all, the fewer people there should be. That alone should make job slow growth. It has not, though, for even simpler reason: The Trump administration has pushed a lot of money into the economy. Cutting taxes for corporations might not have much bang for the buck in terms of stimulus, but that does not matter too much when you're talking about 1.5 trillion bucks. That's going to do something, and it has.
But the question, of course, is how long it's going to last. The Rationale for the Trump Tax cuts What they would do is put more money into wealthy investors' pockets in the short-run but also – and more importantly – give companies extra incentive to invest in productivity-enhancing factories and equipment, boosting growth in the long run as well. So far, though, that really has not happened. Business investment was just a little above-average trickle.
The lesson, then, is that even a bad stimulus can be good for the economy for a little while. A better stimulus would obviously be, better, but any child can not even look back. The real issue is the boost today wants to bring about tomorrow. The Trump Tax cuts do not look as if they will pass that test, but new infrastructure spending, which would probably have created more jobs now, and thus set the stage for certainly might.
Unfortunately, Trump prefers to pay rich people's taxes. So enjoy this mini-surge while you can: It's living on borrowed time and money.