The U.S. Department of Labor released hiring and unemployment data from this past August today. The report shows that 156,000 new jobs were added in August while the unemployment rate ticked up slightly to 4.4 percent. Jobs growth was down from the previous two months, and was slightly below market expectations, but the report indicates that the economy is by and large on the right track.
It comes two days after the Commerce Department released data showing robust GDP growth, which measures the total amount of spending (or the total value of goods and services produced) in the economy. The economy expanded at an annual rate of 3 percent last quarter, which beat market expectations and is considered unusually strong this far into an economic expansion. 3 percent growth is still at the low end of the goal set by President Donald Trump, in part because of weak productivity gains, but it nonetheless indicates that households and businesses are continuing to spend.
However, despite what looks like a stable economy, many of the anxieties that have led to a populist turn in American politics remain. Part of this is because while the headline numbers — low inflation, rising growth, low unemployment – are optimistic, some of the underlying data is more worrying. Wages, for instance, continue to lag, with the Labor Department report showing growth of just 0.1 percent in August. That continues a longer-term trend of sluggish wage growth even as the labor market tightens and corporate earnings rise. It’s of course true that consumers today can buy better products for less money than they could ten years ago, so citing wage growth as evidence of a crisis is misleading. But if the data doesn’t show a crisis, it does show a relative stagnation. And this has political implications for a populist President who ran not as a champion of corporate America, but as a friend of the working class.
So despite apparently strong economic data, the economy seems to be a contributing reason that, according to Pew, “more people say the future for the next generation of Americans will be worse today (48%) than did so in either 2009 (32%) or 2008 (34%), during the economic recession.” The phrase “economic expansion” cannot assuage the pessimism pervading people whose wages are flat.
But another reason is that there’s more to life as an American citizen than life as a participant in the American economy. Jobs data might be a good gauge of the health of the latter, but, as Brink Lindsey puts it in a searching piece, “if we follow the experts in looking at our problems solely from an economic perspective, we will fail to appreciate the true gravity of our situation.” The pessimism Pew documents owes not just to weak wage growth but to political polarization; to less fulfilling work; to fraying civic attachments. Yes, jobs growth came in slightly below expectations, and spending growth continues apace. That’s an important story, but it’s far from the only one.