Critically, the unemployment level at 3.7 percent is the lowest it has been since 1969. And that comes amid rising labor participation among 16-to-64-year-olds, now at its highest level since 2010, a time when it was still significantly declining.
The number of 16-64 year olds not in the labor force has decreased from 55.9 million in Jan. 2017 to 54.9 million today, a decrease of 1 million, while those in the labor force has increased from 149.4 million to 151.7 million, an increase of 2.3 million.
As a result, labor participation among 16-64-year-olds has increased from an average of 72.95 percent in 2016 to 73.4 percent even as 16 and over (including seniors) has remained stuck at 62.7 percent.
Once you correct for the retirement wave among Baby Boomers, Americans who had been on the sidelines are finally getting back to work. This is really great news.
To get back on trend for 3 percent for year, the U.S. economy now needs to grow at about an inflation-adjusted 3.98 percent in the third quarter, and then it can finish out the fourth quarter with 3 percent. That would get us exactly 3 percent for the year.
The good news is that the economy may already be on trend to doing exactly that. Right now, Atlanta Fed’s GPDNOW estimate is coming in at 4.1 percent for the third quarter.
President Trump promised that if he were elected, America would start winning again, and it’s hard not to give credit where credit is due. The tax cuts, the deregulation, the emphasis on better trade deals — now, Canada, Mexico, South Korea, and Japan are under his belt — it is all working exactly the way Trump said it would.