Last week’s national jobs report was good news. Unemployment fell to 3.9 percent. In Utah, the latest figures show unemployment at 3.1 percent, and the state had the highest private sector job growth in the nation in March.
By these measures, this is the best of times, indeed.
The good news can be tempered by only one thing. April marked the 91st straight month of job growth — the longest such string on record. An end to that growth must come someday. It would be foolish to believe otherwise. The question is whether the nation will be ready to ride it out when it does.
Indications are that the answer is no. The tax cuts recently enacted in Washington have led to projections that the nation will return to trillion-dollar annual deficits by 2020. The last time Washington experienced such deficits was in reaction to the Great Recession, the last economic downturn. If such deficits exist during times of expansion and prosperity, how will the federal government be able to react to a downturn?
Michael Gapen, chief U.S. economist at Barclays, told CNN Money last month that this sort of overspending is “not what traditional economic theory suggests is appropriate fiscal policy at this mature stage of the business cycle.”
That’s an indication both political parties have lost sight of the need to contain their desires. Republicans once campaigned on the need for a balanced budget. They used to warn about the consequences of runaway spending for entitlement programs — Medicare, Medicaid and Social Security, especially. They lectured about deficits and created fiscal cliffs and sequestration tactics to jolt colleagues into responsible behavior.
No more. As the recently enacted tax cuts showed, neither party seems worried any longer about reining in the practice of spending more than the government collects each year.
Another severe downturn might prompt the Federal Reserve to return to some of the tools it used to blunt the last recession, such as massive bond purchases and low to zero interest rates. Politicians may want to rescue important businesses whose loss could trigger a ripple effect of unemployment, as they did with General Motors.
But their ability to do so would be severely hampered without raising those annual deficits even higher, endangering an economy that already requires too much productivity just to make interest payments on the national debt.
It’s difficult to focus on such distasteful things at a time when the nation is so prosperous.
The best news to come out of last Friday’s jobs report may have been that the percentages of part-time workers who want full-time jobs and people who have quit looking for work have decreased, as well. Companies are struggling to find workers.31 comments on this story
And unlike previous times when unemployment fell this low, the stock market is not showing the kind of excess that signals trouble ahead, nor is inflation a factor. The only frustrating indicator is that wages have not risen as much as a labor shortage might predict, but that could change soon.
For workers, this is a golden age. Jobs are plentiful.
Just remember that prosperity cannot diminish the value of prudence and careful planning. History is filled with the sad stories of those who believed otherwise.