Unemployment could drop below 3 %

Bloomberg:
U.S. unemployment is primed to fall significantly further and could drop below 3 percent for the first time since 1953, the year central bank chief Jerome Powell was born.

That’s according to economists at Goldman Sachs Group Inc., JPMorgan Chase & Co., Deutsche Bank AG and Moody’s Analytics Inc. With an already solid economy set to receive a double dose of fiscal stimulus, they argue that a drop in joblessness from its 17-year low of 4.1 percent in February is all but inevitable.

And they say that a break below 3 percent is a distinct possibility -- even with the return of some workers to the labor force -- especially if Federal Reserve Chairman Powell doesn’t do more to slow the economy down.

“We have unemployment at 3.25 percent by the end of 2019,” Jan Hatzius, Goldman’s chief economist, said in an email. “A decline below 3 percent at some point is obviously possible.”

Such a drop would return unemployment to levels not seen in 65 years, when millions of Americans were out the labor force serving in the military during the Korean War. A job market that tight would be a boon for workers and for President Donald Trump.
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This could be devastating news for Democrats who have argued against Trump's economic plan and predicted disaster because of his tax cuts.  The jobs market is already pulling people back into the labor force who had given up looking for a job in the Obama economy.

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