Ten years ago this month, the U.S. unemployment rate was a disastrous 9.5%. General Motors, requiring a government bailout, filed for bankruptcy protection. Would the American auto industry even survive?
That bleak age isn’t forgotten, but it is long gone. The U.S. pulled out of recession in June 2009 and hasn’t looked back. Barring catastrophe, the economy next month will set a new record for the longest continuous period of expansion. The current record was set amid the 1990s tech boom.
A boast like that — 10 years of straight growth! — means less to individual Americans than their current state of economic wellness and expectations for the future. Today’s paycheck, and tomorrow’s, is more important than 2009’s.
The expansion speaks to the resilience of the American economy — or more specifically, the relentless drive of American employers, entrepreneurs and workers to compete, reinvent and succeed. Business was brought to its knees during the Great Recession of 2007-09. Since then, the economy hasn’t stopped growing.
In other words, Americans are in the thick of what is shaping up to be a record-setting era of increased prosperity. The unemployment rate today is 3.6%, a 50-year low. The jobless rate for African-Americans and Latinos is at or near record lows since 1973 when such record-keeping began. Stocks are at startling highs. The situation isn’t perfect: Many people who fell on hard times haven’t recovered and home values haven’t come back everywhere. But jobs are plentiful, which means so is opportunity.
On the Great Recession and its aftermath: The financial crisis was caused in part by lax, greedy lenders who set off an unsustainable housing boom. The subsequent crash took financial institutions with it and wiped out trillions of dollars of wealth. To save the day, the U.S. government stepped in with a monumental bailout supported by years of aggressive Federal Reserve actions.
Given the government’s vast resources, recovery at some point was inevitable. What’s remarkable is the uninterrupted growth that’s followed. We attribute this to dynamism — the ingenuity and flexibility of Americans and their economy. Consider the vast scale of the digital revolution, and how the most important personal tool most people possess — an internet-enabled cellphone — was introduced by Apple in 2007.
Think about how the nature of work has changed: The company leasing the most office space in downtown Chicago today is WeWork, a firm that offers shared work space. WeWork was founded in 2010.
Other accomplishments: Next year, the U.S will export more energy products than it imports, reversing 70 years of history. GM, recovered from bankruptcy, expects a radically different future driven by electric vehicles.
Those are specifics. A broader aspect of American ingenuity: Productivity, which measures American workers’ efficiency, is rising at the fastest clip since 2010. That means the economy “can grow at a faster pace on a more sustained basis,” economist Blerina Uraci of Barclay’s told The Wall Street Journal. What does greater productivity look like? One example is how companies today use cloud computing and machine learning — both novel concepts in 2007 — to manufacture goods more efficiently.
Economies, alas, don’t expand perpetually. As always, the next recession is coming, the only question is when. For now, American businesses are getting big boosts from tax cuts and deregulation under President Donald Trump, but his hostility toward global trade puts growth at risk: While U.S. companies, farmers and consumers benefit enormously from trade, Trump wages a costly tariff tiff with China. The quicker he resolves such disputes, the better. The Federal Reserve has hinted it may lower interest rates to mitigate the damage.
Ten years of economic expansion is a remarkable achievement for American employers and workers. Today’s Mission Possible: Maintain the private sector’s refreshing success — and keep the boom going.