Don’t underestimate U.S. expansion: It’s headed to a record

By Shobhana Chandra and Steve Matthews of Bloomberg News.

That is good news. But the article does mention a shortage of skilled workers. This is an example of structural unemployment.  I did a post on this a few weeks ago. See Structural Unemployment In The News. One of the things I mentioned there is "The percentage of 25-54 year-olds employed is 78.4% for May. It was 78.6% in April. It is still below the 79.7% in December 2007 when the recession started." So the low unemployment rate might not be the good news it sometimes is.

Excerpts from the Bloomberg article:

"Widely disdained for its relatively weak growth and pay gains, the expansion is about to complete its eighth year — and it’s headed to become the longest on record, according to a Bloomberg survey of economists. Respondents put a 60 percent probability, based on the median estimate, on the growth streak running through at least July 2019 and thereby reaching 121 months, topping the 10 years of gains during the 1990s."

"“The U.S. economy looks pretty healthy right now when you think in terms of sectors that could blow up,” said Stephen Stanley, chief economist at New York-based Amherst Pierpont Securities LLC. Having avoided any “violent bounceback” during the recovery, “most sectors seem to have room to run,” signaling continued moderate growth, he said.

A strong job market, subdued inflation, low borrowing costs and healthier finances will be a tailwind for consumer spending while business investment, a laggard so far, is expected to join the drivers of growth. Even trade may become less of a drag."

"Current demand is getting help from the labor market. About 15 million jobs have been added since the recession ended in June 2009, and unemployment is at a 16-year low. Payroll gains have probably peaked, though they’re exceeding what’s needed to keep the jobless rate steady as people enter the workforce. A sustained acceleration in wages is still missing even with the U.S. near maximum sustainable employment."

"shortages of skilled workers and available lots are weighing on residential [housing]starts, which fell in May."

[Economists in a survey think] "the probability of a recession in the next 12 months was only around 20 percent."

"Companies chose to hire rather than invest in equipment, which helps explain why productivity is barely budging."