The headline numbers for April are terrific. The economy added 211,000 jobs in April, and the unemployment rate fell to 4.4 percent. That is not just the lowest jobless rate in a decade; it also matches the lowest level reached during the mid-2000s expansion. The last time it was lower was May 2001, 16 full years ago.
A caveat is warranted, as labor force participation of prime age works (25-54) is still a few percentage down from its 2001 peak. This is not surprising, as I take the end of work seriously as a thesis. But, I have to admit that in 2008 we’d probably be surprised that nearly a decade of very modest economic growth on a yearly basis has led us here.
I remember listening to commentators in the dark years right after the financial downtown explaining how many quarters of job growth would be needed for us to reach ~4 percent employment. It just seemed implausible to them at that time, and I have to say that I probably agreed with them on some level. But here we are.
But whenever there is exuberance about full employment and trillion dollar companies I start to wonder if perhaps we’re living before the fall. Are we going to go into a recession soon? I suspected something was off in the spring of 2007…though my pessimism in 2012 didn’t seem to pan out.