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Departing occupants of the White House rarely hand off an improving economy to a successor from the opposing party.
When Barack Obama was waiting in the wings after the 2008 presidential election, for example, the economy was in a severe downward spiral: Employers reported cutting 533,000 jobs that November, the biggest monthly loss in a generation.
But according to the government’s report on Friday, Donald J. Trump can expect to inherit an economy that has added private sector jobs for 80 months, put another 178,000 people on payrolls last month and pushed the unemployment rate down to 4.6 percent today from 4.9 percent the previous month. Wage growth, though slower, is still running ahead of inflation, and consumers are expressing the highest levels of confidence in nearly a decade.
The Federal Reserve is confident enough about the economy’s underlying strength that it is now set to raise the benchmark interest rate when it meets later this month.
The jobless rate for November, the lowest since August 2007, “is a testimony to how strong employment growth has been,” said Jim O’Sullivan, chief United States economist at High Frequency Economics.
Jason Furman, now chairman of President Obama’s Council of Economic Advisers, remembers the transition eight years ago, when he was crammed into his office with a circle of key officials as the latest jobs numbers from the Labor Department landed.
“It was an utterly terrifying time, the likes of which none of us had ever seen in our lifetimes,” Mr. Furman recalled. Fearing that “the economy was following the same trajectory that it did at the beginning of the Great Depression,” everyone was focused on how to “rapidly slow the bleeding and figure out how to get the economy growing again.”
By contrast, Mr. Furman said, “the economy today is healthy and it’s improving.”
For all the improvements, tens of millions of Americans understandably feel that the recovery has passed them by. Those without skills are relegated to low-paying positions without steady schedules, security and benefits. Breadwinners who once held well-compensated manufacturing jobs are angry about being forced to settle for lower-wage service jobs — or no jobs at all.
Profound anxiety, particularly among the white working class, about the ability to reach or comfortably remain in the middle class is one of the factors that helped propel Mr. Trump to the White House.
Pockets of weakness also surfaced in the latest jobs report, which showed that more people dropped out of the labor force last month than joined it. Manufacturing jobs declined further, and there are still plenty of part-time workers who would rather be full time. And while the official jobless rate for high school graduates fell to 4.9 percent, it is more than twice the rate for college graduates.
“There is a bifurcation of the work force,” Jonas Prising, chairman and chief executive of the ManpowerGroup, one of the largest recruiters in the United States. People who are able to take advantage of advances in technology, globalization and other shifts that favor those with the right skills for the nation’s advanced services are thriving.
For others, the prospects do not look good. “There used to be part of the work force that had well-paying jobs that were low or unskilled,” Mr. Prising said. “Those kinds of jobs are very difficult to find today.”
The deal that Mr. Trump made with the heating and cooling company Carrier this week to keep 1,000 manufacturing jobs from moving to Mexico from Indiana is emblematic of the kind of actions he said he would take as president to help blue-collar workers.
But there are limits to the power of persuasion.
Betsey Stevenson, an economist at the University of Michigan and a former economic adviser to Mr. Obama, said that manufacturing, while still a driving force in the economy, employed fewer and fewer people. More than 80 percent of jobs are now in the service industry, Ms. Stevenson said, and Mr. Trump should be thinking more about how to match workers with those jobs.
“The economy is in a great place, and his biggest challenge is continuing that,” she said.
Some economists worry that the Federal Reserve is too focused on fears of future inflation and that it should hold off on any increase in rates until conditions have improved further. “There’s no reason to pre-emptively slow the economy down, given that we’re starting from less than full employment,” said Elise Gould, an economist at the left-leaning Economic Policy Institute in Washington. “Right now, the priority should be keeping the economy on track and moving it forward.”
Such pleas are unlikely to win the day. At last month’s meeting of the Federal Reserve, members concluded that the case for an increase in the benchmark rate had been “strengthened,” and that they would be ready to move “so long as incoming data provided some further evidence of continued progress.”
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