Russia, Obamacare, obscene White House staff fights — forget about all that. Thankfully all the dysfunction in Washington has failed to discourage companies from hiring.
The government this week is likely to report the economy added around 185,000 new jobs in July, keeping unemployment near a 16-year low of 4.4%. That’s good news for the rest of America.
Washington could do more to help, of course. A lot more.
Even with the sudden death of the Republican plan to replace Obamacare, Congress can still give the economy a lift by slimming down a bloated tax code and increasing spending on roads, bridges and other public works in disrepair.
A bruised Republican party, seeking victory anew, aims to reform the tax code next. Big business plans to get behind them. The Business Roundtable, a group representing the largest American companies, said Friday it will spend millions of dollars to back the effort.
The long length of the recovery, ironically, has created an unexpected problem.
The failure to reform the tax code could reduce hiring and investment and harm the economy, CEOs say. “The time for real reform is now,” said Josh Bolten, president of the Roundtable.
Maybe so, but it’s not as if the economy is struggling. The U.S. is on track to grow 2%-plus in 2017 following a big rebound in gross domestic product in the second quarter. The economy is now in the ninth year of expansion and shows no signs of deterioration.
Also Read: U.S. economy speeds up in second quarter after bumpy ride earlier in the year
“The U.S. economic expansion remains on a steady growth trajectory despite the gridlock permeating Washington D.C.,” said Scott Anderson, chief economist at Bank of the West.
The long length of the recovery, ironically, has created an unexpected problem for business. The U.S. has generated 16.6 million new jobs since 2010, squeezing the pool of available workers so much that many companies now complain of a labor shortage.
With job openings near record highs, companies either have to pay more in wages, increase spending on training or buy more machines to take the place of workers to keep up with rising demand.
For people looking for work, it’s the best time to find a job in more than a decade.
The ultra-tight labor market, however, begs the question: Just how long can companies continue to hire at the current rate of about 180,000 a month?
The pace of hiring in the U.S. has already slowed sharply since hitting a post-recession peak of 250,000 a month in 2015. And economists expect hiring to slow even further — tax reform or not — because there’s fewer people looking for jobs.
The strength of the economy, derided by candidate Trump as weak, is what allows President Trump to weather for now the political storm in Washington that he and his own advisors have created.
“The odds of full implementation of the president’s pro-growth agenda have slipped further,” said David Berson, chief economist at Nationwide.[“Source-marketwatch”]