Is it too good to be a real economy?

The US economy once again exceeded expectations in April, as a new month of vigorous recruitment and falling unemployment forced experts to re-evaluate how good the economy could be and the length of expansion current.

Employers created 263,000 new jobs last month, a record 103 consecutive months of growth, and the official unemployment rate dropped to 3.6%, the lowest level since 1969, the Department of Commerce said on Friday. Job.

The latest good news is accompanied by strong wage growth, buoyant equity markets and a first-quarter growth report released last week that shattered expectations. It should also be noted what economists do not see: the high inflation rates that accompanied previous expansions.

As the economy continues to grow beyond what many predicted was possible, some analysts and officials are wondering if the current state of the economy is too good to be true – and that the experts must miss the warning signs.

Some have expressed concern over rising debt after the Trump government contracted large loans to fund additional tax cuts and public spending to boost growth. President Trump is actively seeking more, including a $ 2 trillion infrastructure package, additional military spending and additional stimulus from the Federal Reserve.

But few, if any, deny the remarkable strength of the US economy.

"Spectacular is the only way to describe this job report," said Sung Won Sohn, an economist at Loyola Marymount University of SS Economics. "It's hard to believe that this 10-year-old recovery continues to pump home."

Previous eras of such economic performance have come to an end. The prosperity of the 1960s was followed by galloping inflation in the 1970s; the long boom of the 1990s erupted in tandem with the tech bubble, and the 2000s ended with the collapse of a housing bubble that turned into a global financial crisis and the worst recession for several generations.

But so far, during this period of growth, inflation has remained moderate and most believe that financial market risks are manageable.

In July, economic expansion will be the longest in US history, breaking the record of the 1990s. Hiring was generally expected to slow down at this stage of the economic cycle. But companies continue to add new people with huge gains for women and some minorities. The Spanish-American unemployment rate fell to 4.2% in April, the lowest ever recorded. The unemployment rate for women is now 3.4%, the lowest since 1953 and 0.3% lower than for men.

Although some signs of slowing down (this year's employment growth averages 205,000 per month, up from 223,000 last year), the pace remains well above expectations. And the abundance of "We hire" signs and online job postings attract people who were not necessarily looking for a job in the job market.

Average hourly earnings rose 3.2% last year, well above inflation. Low-wage workers posted the largest gains, with firms scrambling to fill their positions and many states raising their minimum wages.

The question of how long a prosperous period can last is a widely debated topic, from the White House to Wall Street to convenience stores.

"Can this economy be maintained or improved?" The short answer is: we do not know, it depends on productivity growth, "said Joseph LaVorgna, chief economist for the Americas at Natixis, a bank 39; investment.

At present, the vital signs seem solid. Most of America's economic growth is driven by consumer spending and people are expected to keep it because jobs are plentiful, wages rise, and optimism about The economy has fallen back to the highest since about 2000, according to Gallup polls.

"Expansions do not just die of old age, something has to take us away from full employment," said Christina Romer, professor of economics at the University of California at Berkeley and former chair of the Council of Advisers. Obama's economic. "At present, the US economy seems to be relatively stable."

Many economists told the Washington Post that this week's most encouraging economic news was actually productivity, not jobs. Productivity – a measure of what a worker can earn in one hour – has exceeded expectations by 2.4% in the first quarter compared to the previous year, the best rate since 2010.

Productivity growth has been anemic during expansion over the past decade, with little sign of rising. Economists estimate that a productivity rate above 2% should fuel strong growth and higher wages. But this critical measure is notoriously difficult to predict.

"You have to give the White House credit in terms of productivity, there has been a noticeable change in this area," said Doug Holtz-Eakin, an economist who advised John McCain's presidential campaign. "It's very encouraging, but you can not celebrate too early."

The White House has applauded the news as proof that Trump's policies work. At the same time, Trump continues to demand more stimulus, which is very unusual at a time when the economy seems strong.

"We are the envy of the world – and the best is yet to come!" Trump tweeted on Friday.

The president's victory came three days after he called on the US Federal Reserve to cut interest rates and buy more state bonds, policies typically used only in times of economic crisis and financial.

Fed Chairman Jerome Powell left interest rates unchanged this week and showed little sign of wanting to change them in the near future, preferring to wait to see what would happen to the economy before taking additional measures.

One of the enigmas of the current economy is why inflation remains so low. Economic theory suggests that, now that the unemployment rate has been less than or equal to 4% for more than a year, wages are expected to increase more rapidly, forcing firms to raise the price of goods to pay additional salary. But that does not happen yet.

"There is just not a lot of inflationary pressure despite the very low unemployment rate," said Susan Houseman, economist and vice president of the W.E. Upjohn Institute for Employment Research.

The hiring has been strong this year in just about every sector except retail and manufacturing. Companies even continue to recruit temporary employees, who are often the first to have the ax at the first sign of trouble.

Recessions being difficult to predict, some economists have argued that the best question now is how to ensure that this economy helps as many people as possible during good times.

"The unemployment rate is not 3.6% for everyone," said William Rodgers, chief economist at the Heldrich University's Heldrich Workforce Development Center. Rutgers. "I hope that the president and his team do not think it's the best we can do, especially for young people from minority backgrounds."