Autopilot Economy Tracker: Benchmarks to beat in order to claim policy-driven improvements to American wages and employment

EPI’s Autopilot Economy Tracker provides a set of real-time benchmarks to help Americans gauge how well the public officials elected to serve them are performing as stewards of the U.S. economy. The benchmarking is provided by a set of charts that show changes in key indicators of economic health relative to how the indicators would have changed had the economy simply been on autopilot. By “autopilot” we mean how the indicators would have changed under a continuation of the trends already underway before the Trump administration took the wheel.

In each chart, the trajectory of the preexisting trend (the “autopilot projection”) constitutes the baseline against which to judge policymakers’ performance at any point in time. If the indicator measured is above or below the baseline, policy decisions likely had an effect and policymakers can claim credit—or shoulder blame. We focus on changes between now and 2019 because we think any projection of developments beyond 2019 are too unreliable to include. Our hope is that this tool helps people make fair and informed evaluations of economic policymakers’ decisions.

Unemployment rate

1
Date Actual Autopilot projection CBO projection Target
Jan-2015 5.7 4
Feb-2015 5.5 4
Mar-2015 5.5 4
Apr-2015 5.4 4
May-2015 5.5 4
Jun-2015 5.3 4
Jul-2015 5.2 4
Aug-2015 5.1 4
Sep-2015 5 4
Oct-2015 5 4
Nov-2015 5 4
Dec-2015 5 4
Jan-2016 4.9 4
Feb-2016 4.9 4
Mar-2016 5
Apr-2016 5 4
May-2016 4.7 4
Jun-2016 4.9 4
Jul-2016 4.9 4
Aug-2016 4.9 4
Sep-2016 5.0 4
Oct-2016 4.9 4
Nov-2016 4.6 4
Dec-2016 4.7 4
Jan-2017 4.8 4.7 4.746 4
Feb-2017 4.7 4.678 4.719 4
Mar-2017 4.5 4.656 4.693 4
Apr-2017 4.4 4.633 4.666 4
May-2017 4.3 4.611 4.638 4
Jun-2017 4.3 4.589 4.610 4
Jul-2017 4.3 4.567 4.582 4
Aug-2017 4.4 4.544 4.561 4
Sep-2017 4.2 4.522 4.541 4
Oct-2017 4.1 4.500 4.520 4
Nov-2017 4.1 4.478 4.502 4
Dec-2017 4.1 4.456 4.485 4
Jan-2018 4.1 4.433 4.467 4
Feb-2018 4.1 4.411 4.457 4
Mar-2018 4.1 4.389 4.448 4
Apr-2018 4.1  4.367 4.438 4
May-2018 4.344 4.431 4
Jun-2018 4.322 4.425 4
Jul-2018 4.300 4.418 4
Aug-2018 4.278 4.420 4
Sep-2018 4.256 4.423 4
Oct-2018 4.233 4.425 4
Nov-2018 4.211 4.433 4
Dec-2018 4.189 4.441 4
Jan-2019 4.167 4.449 4

Source: EPI analysis of Bureau of Labor Statistics' Current Population Survey public data

Unemployment rate

Current: 4.1%
Autopilot: 4.4%
Target: 4.0%

During the Great Recession, the unemployment rate shot up as millions of working people lost their jobs, but it has fallen steadily since late 2010. As the labor market has improved, the rate at which unemployment has fallen has gradually slowed, and this should continue. If the unemployment rate continued to fall at the current pace of improvement, it would hit 4.0 percent in 2019.

Most forecasters, including the Congressional Budget Office (CBO) think that unemployment cannot, or at least will not, fall much further from today’s level. The expectation behind this stalled downward march in projected unemployment is an assumption that the Federal Reserve will slow the economy by raising interest rates. And the Fed certainly could raise rates (regardless of whether it should raise rates). The CBO projection has the unemployment rate leveling off before reaching recent historical lows. However, we think it is important to compare performance on unemployment with EPI’s autopilot projection. Our projection shows that unemployment could hit its recent historic low of 4.0 percent by January 2019 if it continued to fall at the same rate it did from the end of 2015 to the end of 2016.

It is not obviously unrealistic to think that the unemployment rate could reach 4.0 percent. During the late 1990s and 2000s, the unemployment rate dipped below 4.0 percent for five months, and it averaged 4.0 percent in the full year 2000. During this period, inflation-adjusted wages rose across the board—for the only time in the last generation. This should be the type of labor market we aspire to have. Decisions by the Federal Reserve or by fiscal policymakers that thwart progress toward this goal would rob tens of millions of workers of the opportunity to be pulled back into the labor force or enjoy stronger wage growth.

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Share of prime-age population (25–54) with a job

2
Date Actual Autopilot projection Target 
Jan-2015 77.1 81.6
Feb-2015 77.2 81.6
Mar-2015 77.2 81.6
Apr-2015 77.2 81.6
May-2015 77.2 81.6
Jun-2015 77.4 81.6
Jul-2015 77.1 81.6
Aug-2015 77.2 81.6
Sep-2015 77.2 81.6
Oct-2015 77.2 81.6
Nov-2015 77.4 81.6
Dec-2015 77.4 81.6
Jan-2016 77.7 81.6
Feb-2016 77.8 81.6
Mar-2016 78 81.6
Apr-2016 77.8 81.6 
May-2016 77.8 81.6
Jun-2016 77.9 81.6
Jul-2016 77.9 81.6
Aug-2016 77.8 81.6
Sep-2016 78 81.6
Oct-2016 78.2 81.6
Nov-2016 78.1 81.6
Dec-2016 78.1 81.6
Jan-2017 78.2 78.1 81.6
Feb-2017 78.4 78.1861 81.6
Mar-2017 78.5 78.2389 81.6
Apr-2017 78.6 78.2917 81.6
May-2017 78.4 78.3444 81.6
Jun-2017 78.6 78.3972 81.6
Jul-2017 78.6 78.4500 81.6
Aug-2017 78.4 78.5028 81.6
Sep-2017 78.9 78.5556 81.6
Oct-2017 78.9 78.6083 81.6
Nov-2017 79.0 78.6611 81.6
Dec-2017 79.1 78.7139 81.6
Jan-2018 79.0 78.7667 81.6
Feb-2018 79.3 78.8194 81.6
Mar-2018 79.2 78.8722 81.6
Apr-2018 78.9250 81.6
May-2018 78.9778 81.6
Jun-2018 79.0306 81.6
Jul-2018 79.0833 81.6
Aug-2018 79.1361 81.6
Sep-2018 79.1889 81.6
Oct-2018 79.2417 81.6
Nov-2018 79.2944 81.6
Dec-2018 79.3472 81.6
Jan-2019 79.4000 81.6

Source: EPI analysis of Bureau of Labor Statistics' Current Population Survey public data

Prime-age employment-to-population ratio

Current: 79.2%
Autopilot: 78.9%
Target: 81.6%

After falling dramatically in the Great Recession, the share of the prime-age population with a job has been recovering steadily, since 2011. Preexisting trends would sustain this recovery and drive the share to 79.4 percent by 2019.

The prime-age employment-to-population ratio (EPOP), which shows the share of the population age 25 to 54 with a job, is a key indicator of labor market health. Our projection shows that if the prime-age EPOP continued on the same pace of recovery as it has over the last year, it would reach 79.4 percent in 2019. Ambitious policymakers should aim for further improvement, as the EPOP has averaged as high as 81.6 percent (as it did over the 12-month period ending in 2000). At the current rate of improvement, it will not hit that 81.6 percent benchmark until 2022.

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Year-over-year growth in wages

3
Date Actual Autopilot projection
Jan-2015 2.19%
Feb-2015 1.93%
Mar-2015 2.22%
Apr-2015 2.22%
May-2015 2.34%
Jun-2015 2.17%
Jul-2015 2.12%
Aug-2015 2.24%
Sep-2015 2.24%
Oct-2015 2.52%
Nov-2015 2.43%
Dec-2015 2.56%
Jan-2016 2.55%
Feb-2016 2.38%
Mar-2016 2.50%
Apr-2016 2.61%
May-2016 2.44%
Jun-2016 2.56%
Jul-2016 2.76%
Aug-2016 2.47%
Sep-2016 2.63%
Oct-2016 2.70%
Nov-2016 2.57%
Dec-2016 2.65%
Jan-2017 2.40% 2.54%
Feb-2017 2.72% 2.56%
Mar-2017 2.55% 2.59%
Apr-2017 2.51% 2.61%
May-2017 2.46% 2.63%
Jun-2017 2.50% 2.65%
Jul-2017 2.49% 2.67%
Aug-2017 2.60% 2.70%
Sep-2017 2.83% 2.72%
Oct-2017 2.28% 2.74%
Nov-2017 2.47% 2.76%
Dec-2017 2.66% 2.78%
Jan-2018 2.77% 2.80%
Feb-2018 2.57% 2.83%
Mar-2018 2.72% 2.85%
Apr-2018 2.87%
May-2018 2.89%
Jun-2018 2.91%
Jul-2018 2.94%
Aug-2018 2.96%
Sep-2018 2.98%
Oct-2018 3.00%
Nov-2018 3.02%
Dec-2018 3.04%
Jan-2019 3.07%
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The target is nominal wage growth consistent with the Federal Reserve Board's 2 percent inflation target, 1.5 percent productivity growth, and a stable labor share of income. Wages are for nonfarm employees.

Source: EPI analysis of Bureau of Labor Statistics' Current Employment Statistics public data series

Nominal wage growth

Current: 2.7%
Autopilot: 2.8%
Target: 3.5–4%

Wage growth was sluggish and essentially unchanged for years following the Great Recession but has picked up slightly, to an average of 2.6 percent in 2016. As the economy continues to tighten, preexisting trends indicate that wage growth will continue to improve. At the current pace of improvement, by 2019 we should be significantly closer to the Fed’s wage-growth target of 3.5 to 4 percent.

The horizontal shaded area in the chart represents growth of 3.5 percent to 4 percent—nominal wage growth consistent with the Fed’s 2 percent inflation target and a labor share of income at historic norms (given 1.5 percent trend productivity growth). We would need to see consistent wage growth above this range before there is a hint of upward pressure on prices stemming from too-tight labor markets. Hence, as long as wage growth is below this healthy target, policymakers—including the Fed, President Trump, and Congress—should do nothing to slow economic growth.

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Total number of jobs in the economy: Payroll employment

4
Date Actual CBO projection Trump projection 
Jan-2015 140592000
Feb-2015 140859000
Mar-2015 140937000
Apr-2015 141219000
May-2015 141545000
Jun-2015 141736000
Jul-2015 141992000
Aug-2015 142156000
Sep-2015 142244000
Oct-2015 142595000
Nov-2015 142859000
Dec-2015 143093000
Jan-2016 143196000
Feb-2016 143453000
Mar-2016 143688000
Apr-2016 143862000
May-2016 143896000
Jun-2016 144181000
Jul-2016 144506000
Aug-2016 144681000
Sep-2016 144945000
Oct-2016 145085000
Nov-2016 145257000
Dec-2016 145437000
Jan-2017 145696000 145656000 145696000
Feb-2017 145896000 145806333 145898417
Mar-2017 145969000 145956667 146100833
Apr-2017 146144000 146107000 146303250
May-2017 146299000 146227667 146505667
Jun-2017 146538000 146348333 146708083
Jul-2017 146728000 146469000 146910500
Aug-2017 146949000 146579667 147112917
Sep-2017 146963000 146690333 147315333
Oct-2017 147234000 146801000 147517750
Nov-2017 147450000 146905667 147720167
Dec-2017 147625000 147010333 147922583
Jan-2018 147801000 147115000 148125000
Feb-2018 148127000 147212667 148327417
Mar-2018 148230000  147310333 148529833
Apr-2018 147408000 148732250
May-2018 147499000 148934667
Jun-2018 147590000 149137083
Jul-2018 147681000 149339500
Aug-2018 147764667 149541917
Sep-2018 147848333 149744333
Oct-2018 147932000 149946750
Nov-2018 148003333 150149167
Dec-2018 148074667 150351583
Jan-2019 148146000 150554000
ChartData Download data

The data below can be saved or copied directly into Excel.

Source: EPI analysis of Bureau of Labor Statistics' Current Employment Statistics public data series and Congressional Budget Office data

Monthly growth in payroll employment

Current: 103,000
Target: 208,000

After shedding millions of jobs in the Great Recession, the economy has added jobs every month since 2010. Factoring in both a return to what it considers full employment as well as demographic trends, the CBO estimates the economy will have 148 million jobs by 2019.

On the graph, the green line represents CBO’s projection for payroll employment. In January 2017, President Trump announced a new goal to create 25 million new jobs in the next 10 years, as shown by the orange line. Creating 25 million new jobs in a decade would require adding an average of 208,000 every month. In the long run, this is clearly unrealistic. As explained by a January 2017 EPI blog post, Trump’s job goals would require massive immigration or forcing elderly Americans to work at unprecedented rates. For the next two years, however, adding 208,000 jobs a month would still leave the economy below historic peaks in employment. Because monthly new job numbers in Trump’s projected range are clearly possible in the next two years, the Trump projection line approximates the autopilot projection line against which to measure job growth.

*January 2017 monthly growth in payroll employment value represents 3-month average from November 2016 to January 2017.

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