Is this economy too good to be true?

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. What economists do not see is equally remarkable: 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 and SS Economics. "It's hard to believe that this 10-year-old recovery continues to pump home shopping."

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 expansion of the 90s broke out with the tech bubble; and the gains of the 2000s ended when the collapse of the real estate bubble turned into a global financial crisis and the worst recession for several generations.

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

In July, economic development is expected to be the longest in US history, breaking the record of the 1990s. Hiring was generally expected to slow down at this point in time. business cycle. But companies continue to add employees, with huge gains for women and some minorities. The unemployment rate of Hispanic Americans fell to 4.2% in April, the lowest rate ever recorded. The unemployment rate for adult women is now 3.1%, its lowest level since 1953 and 0.3% lower than that of 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 may not be looking for a job in the job market.

Average hourly earnings rose 3.2% last year, well above inflation. Low-wage workers have benefited the most, with companies scrambling to fill their positions and many states having raised 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 what happens with productivity growth, "said Joseph LaVorgna, chief economist for the Americas at Natixis, an investment bank.

At present, the vital signs seem solid. Most of America's economic growth is fueled by consumer spending, and people are expected to keep it because jobs are plentiful, wages are rising, and optimism is growing. economy is at its highest since about 2000, according to Gallup polls.

"Expansions do not just die of old age. Something must take us away from full employment, "said Christina Romer, a professor of economics at the University of California at Berkeley and former president of President Barack Obama's Council of Economic Advisers. "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 an hour – has exceeded expectations, reaching 2.4% in the first quarter compared to the previous year, its best rate since 2010.

Productivity growth has been anemic during expansion over the past 10 years, 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 credit to the White House in terms of productivity. There has been a definite change, "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 applauded this news by proving that Trump's policy worked. At the same time, the president 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 Friday.

The president's victory comes three days after he called on the Federal Reserve to cut interest rates and buy more government bonds, policies that are generally only used during economic and financial crises.

Fed Chairman Jerome H. 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 was happening with the economy before take additional measures.

One of the enigmas of this economy is why inflation remains so low. Economic theory suggests that, now that the unemployment rate is less than or equal to 4% for more than a year, wages should increase more quickly, forcing companies to increase the price of goods in order to pay the extra wage . But that does not happen.

"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 Center for Workforce Development at Rutgers University. "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."