The U.S. economy is humming again.
October was a month of strong jobs gains. Since President Obama took office, the economy has added 8.7 million jobs.
On many fronts, there’s a lot to cheer. More people are getting back to work. Gas prices are extremely low. The stock market is back near its all-time highs. Home prices have rebounded in most parts of the country.
Even wages and consumer spending are finally starting to show signs of a pickup.
Unemployment is now down to 5% — a healthy level that the U.S. hasn’t seen since before the financial crisis of 2008.
A stronger economy is a problem for Republicans
“With low unemployment and rising wages, the Republicans’ job gets a lot harder,” says Doug Holtz-Eakin, president of the American Action Forum and a former economic adviser to John McCain’s presidential campaign.
Of course, there are still challenges. Economic growth is good, but not great. The U.S. has been expanding at about 2% a year. That’s a lot slower than the usual growth of 3% that America has averaged over the past several decades.
“We’ve been recovering at 2.2%. The question is will we see something that is faster?” says economist Holtz-Eakin.
He adds that Friday’s strong jobs report “is promising but is by no means definitive” that growth will pick up.
Obama economy is picking up
But overall, it’s getting harder to poke holes in the Obama economy.
“Republicans — or Bernie Sanders, for that matter — can no longer credibly claim that the economy is terrible,” says Greg Valliere, chief global strategist at Horizon Investments.
Employment in America hit a low in December 2009 — toward the end of Obama’s first year in office. Since then the economy has actually gained nearly 13 million jobs.
One of the sticking points in the Obama economy was too many people who wanted full-time jobs had to settle for part-time work. There were concerns that the Affordable Care Act would cause employers to keep workers part-time so they wouldn’t have to pay health care benefits.
So far, the evidence isn’t showing that. In the past year, 1.2 million Americans have been able to transition from part-time to full-time work, an encouraging sign.
The other frequent criticism is that so few Americans are working at all. The so-called labor force participation rate is at the lowest level since 1977. Some of that is because Baby Boomers started to retire and younger Americans are studying for more degrees. But that is a cultural shift.
How Obama compares to other presidents on jobs
It’s fair to ask: How does Obama compare to his predecessors on jobs?
By this point in their presidential tenures, this many jobs had been added under …
Ronald Reagan: 12.1 million
Bill Clinton: 20.4 million
George W. Bush: 5.4 million
Those figures don’t account for the fact that the U.S. population has been growing. So the gains under Clinton and Reagan would actually look even stronger.
After the Great Recession, the economy is healing, but the question remains whether it will continue to pick up in the coming months.
The Federal Reserve is also widely expected to begin increasing interest rates, something that could cause some short-term turbulence as the economy adjusts.
“Perhaps [the economy] hasn’t fully recovered, but the labor market is looking awfully healthy,” says strategist Valliere.
