DON’T look now, but the U.S. economy has just shifted into fifth gear and is now purring like a Porsche. The latest job numbers indicate that the unemployment rate has fallen to 5.2 percent-its lowest in more than three years-compared with 11 percent in Germany, 10 percent in France, and 8.5 percent in the entire workers’ paradise of Euroland. Today a record number of Americans are working. And these workers are producing more cars, corn, cotton, computer chips, microchips, microwaves, and widgets than ever before. The latest Labor Department data indicate that worker productivity has surged by more than 4 percent for three years in a row for the first time in a half-century. Productivity improvements are the key to higher wage rates, so these are mighty welcome numbers for middle-class workers.
Other signs of bullishness abound. The stock market is up about 45 percent over the past two years and most of the $6 trillion in investor-class losses from the bursting of the financial bubble in 2000-01 have been recouped. America’s economic-growth rate over the past year was 4 percent, which is about twice the progress our industrial-nation competitors have managed to muster. Business investment, a bellwether for growth, continues to surge. Inflation is surprisingly tame. Even the most worrisome economic indicator, the fall in the dollar, has started to stabilize as global investors notice that betting against the U.S. economy is foolish.
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