Paul Krugman: “Last Tuesday President Biden’s Council of Economic Advisers published a blog post warning everyone not to make too much of any one month’s employment report. It presumably released this in advance of Friday’s report to fend off possible accusations that it was just trying to make excuses for a weak number. As it happened, however, the report came in strong: The economy added an impressive 850,000 jobs. The job gain was especially impressive given widespread claims that businesses couldn’t expand because generous unemployment benefits were discouraging workers from taking jobs. (Recent benefit cuts in many states came too late to have affected this report.) Well, somehow employers are managing to hire a lot of people anyway. Oh, and so much for Donald Trump’s warnings that there would be a ‘Biden depression’ if he weren’t re-elected.”

“That said, the council’s points were well taken. Covid-19 created huge dislocations in the economy, and as we recover from these dislocations economic data are unusually noisy – largely because the standard adjustments statisticians make to smooth out things like seasonal variation don’t work well in an economy still distorted by the pandemic. At this point, however, we have enough data in hand to declare that the economy is booming. In fact, it’s booming so strongly that Republicans have pivoted from claiming (falsely) that we’re experiencing the worst job performance in decades to lauding the employment numbers and giving credit to… Trump’s 2017 tax cut. Back to that in a minute. First, let’s try to put this boom in context, by noting that the economy is running hotter than it did during the ‘Morning in America’ boom that gave Ronald Reagan a landslide victory in the 1984 presidential election. We’ve gained three million jobs since Biden took office, or 600,000 jobs a month. This compares with gains of 340,000 a month in the year leading up to the 1984 election. To be fair, Reagan-era job gains took place from a lower base, so it may be more appropriate to compare growth rates. But this still gives Biden the advantage: 5 percent at an annual rate, versus 4.4 percent in 1983-84. And the disparity grows if you compare jobs with the working-age population, which was growing around 1 percent a year in the 1980s but has stagnated in recent years. So it’s a boom. “