This Recovery Isn't Boom or Bust

Last Friday, payroll employment data, from a survey of businesses, showed the US created just 98,000 jobs in March. The consensus of forecasters had expected job growth of 175,000. The other jobs number, which comes from a survey of households, showed 472,000 new jobs in March.

Private jobs have now grown for 85 consecutive months, and the US economy is on the eve of completing its eighth consecutive year of growth. For comparison, the average post-World War II recovery is just 61 months.

Some analysts (they know who they are), who were in the business of finding something wrong with every jobs report for the past eight years found themselves defending a somewhat disappointing March number.

We don't have that problem. Employment data is volatile and monthly jobs numbers are just estimates. Technically, after adjusting for the statistical margin of error, one could say that there was little difference between the 98,000 March government survey data and the 263,000 March ADP employment estimate.

We don't know if weather impeded job growth. We don't know exactly which number was right for March. And, debating the vagaries of each monthly report is a sideshow compared to what is really going on in the underlying US economy.

For the past eight years, the US economy has expanded on a wave of new technology. Fracking, 3-D printing, composite materials, and mapping the genome are huge. Bandwidth, the cloud, apps, smartphones, and tablets are bigger.

Technology has never moved this fast. And while some analysts argue that productivity data are not improving, that is really hard to square with near record levels of corporate profits.

Jobs are growing. Incomes are rising. Profits are rising. The stock market is still undervalued. And inflation is on the upswing – not rapid, hyper-inflation – but a steady acceleration in prices is in the cards for the quarters and years ahead.

For right now, it's a Plow Horse economy, with real GDP growth of 2.1% annualized in Q4-2016 and current estimates of just 1-1.5% annualized real GDP for Q1-2017.