Don’t fear a recession — the economy is looking solid and stable

One of the hardest things to understand about the current economy is that we are in a good, solid place — but not a perfect one.

Last week’s jobs report was a touch light on the number of jobs added, but average hourly earnings were up nicely — and, besides, August tends to be a bit of a squirrely month anyway.

This economy can best be summed up by a classic childhood fairy tale: “Goldilocks and the Three Bears.” The growth is exactly the way Goldilocks prefers her porridge: not too hot, not too cold, but “just right.”

While the nonfarm payroll growth number of 130,000 was disappointing on Friday, ADP’s private payroll growth came in way over expectations — at 195,000.

The labor force participation rate is hovering around multiyear highs, and average hourly earnings came in higher than expected — all against the resilient backdrop of a 3.7% unemployment rate.

That equals a solid, stable economy.

We are not in a recession. Nor are we in a boom. No longer are we adding 200,000 jobs a month, as in President Trump’s first two years.

It’s important to recognize why it is hard to get the unemployment down below this 3.6%-to-4% range.

Part of the reason is the Fed having been way too aggressive with its rate hikes. And part is the tensions with (and tantrums about) China — that never-ending, on-again, off-again saga.

The president needs to be pragmatic, as he was in business, because the China issue has begun to creep into business planning and spending, and that affects future growth.

But for all the ranting and tweeting and dumb opinion pieces, the economy really is just right. No recession in sight, and no boom around the corner.

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