The Bureau of Labor Statistics reported that the economy added 161,000 new jobs in October—enough to absorb new entrants into the labor market and move us slowly closer to full employment. Nominal wage growth increased 2.8 percent over the year, which is a sign of a tightening labor market, where workers may be starting to gain some leverage.
However, the Federal Reserve was correct not to raise interest rates this week, as the economy has been consistently hitting singles, but not hitting it out of the park. To get to full employment, however, doesn’t require a home run every month. Consistently hitting a single or double every month will get us closer to full employment.
The next president will inherit an economy that is moving toward full employment, but it’s not there yet. Hopefully, there will be plenty of opportunities for him or her and Congress to make big, bold investments in much-needed physical and human capital infrastructure, which will not only be a short-term boost, but also support the long-run health of the economy.