We’ve almost returned to normalcy. The labor market is finally tight enough that businesses are having to compete for workers by paying them more. Now, 2.8 percent wage growth is still well below our pre-crisis trend of 3.5 percent to 4 percent. On the other, it’s well above our 1.9 percent inflation rate. Workers, in other words, are seeing their standards of living rise after 15 years where they haven’t.
There are even some tentative (perhaps nascent) signs that this is pulling people off the sidelines and into the job market. The labor force grew by 340,000 last month, and the share of people in their prime working years — 25 to 54 year-olds who, for the most part, should be too old to be in school but too young to be retired — who are in fact working hit a post-criss high of 78.3 percent. We’re still probably a few years away from getting back to the 80 percent it was before the crash, but we’re more than two-thirds of the way back from where we were at the bottom of it.
The bad news for Trump is that there isn’t much he can do to speed this up. Infrastructure spending would certainly help, but that's reportedly been pushed off for at least a year, and, given Republican priorities, might not happen at all. Tax cuts for the rich, meanwhile, don’t have much bang for the buck, stimulative-wise. Other than that, it’s not an exaggeration to say that the extent of his economic policymaking has been taking credit for business decisions that companies had already made, in some cases years ago. That might get a lot of retweets, but it won’t create any jobs.
The good news for Trump, though, is that there isn’t much he can do to slow this down, either. The economy has its own momentum, and it’s hard to see what could knock it off. After all, there isn’t any bubbly behavior that’s threatening to blow everything up, and interest rates are still very low by historical standards. That last part is the only one that might change. The Federal Reserve has basically told us that it’s going to raise rates at its next meeting, and the board might be starting to worry about an inflation rate that, while still below the 2 percent target, has been creeping up a little the last few months. But a series of gradual rate hikes should leave plenty of room for the economy to glide toward full employment — and for wages to keep inching up, too.
All Trump has to do is nothing. Which even an administration as dysfunctional as his might be able to do.