After years of slow recovery, U.S. economy boasts solid gains

JUDY WOODRUFF: July was the second straight month of solid job gains in the United States.

The Labor Department says employers added 209,000 jobs last month. That dropped the unemployment rate down to 4.3 percent, tying a 16-year-low. The good report pushed stocks higher on Wall Street. The Dow Jones industrial average gained 66 points to close at 22092. That is its eighth straight record high.

Let's get an assessment about the job market and the stock market and what it means for millions of Americans.

I'm joined by Mark Vitner, managing director and senior economist at Wells Fargo.

Mark Vitner, welcome to the program.

So, just how good a jobs report is this?

MARK VITNER, Wells Fargo: Well, it's a pretty solid report, pretty much top to bottom; 209,000 jobs exceeded what folks were looking for. We had a small upward revision of the prior data.

And we saw that a very wide majority of industries added jobs. Over 60 percent of the industries that make up the employment survey added jobs during the month of July.

JUDY WOODRUFF: Why is it doing so well? What's the driver behind this?

MARK VITNER: Well, I think that, after eight years of economic growth, things are finally beginning to broaden a little bit.

Previously, most of the growth that we saw in the economy, most of the improvement was coming from either the tech sector or the energy sector. Then energy faltered a little bit, oil prices came down, and things slowed a little bit in 2015 and 2016.

In this past year, we have seen that global growth picked up, oil prices have rebounded a little bit. And so, really, for the first time since the recession, it seems like we're firing on all cylinders. The strength we have in the economy is broadening. It's reaching not only more industries, but more parts of the country.

JUDY WOODRUFF: So, when you say it's firing on all cylinders, you mean literally everywhere in every kind of industry?

MARK VITNER: Well, I wish it was literally everywhere, but it's in more places than it used to be.

And there are a lot of places. And you look within a state. You go to Tennessee, for example, and Nashville's been booming for a long time, but Memphis really hasn't been doing that well. Memphis is finally beginning to see some stronger economic growth.

And some of that is that we have had so much growth in a handful of areas, that their unemployment rates have gotten low enough that companies are now searching for other places where they can find workers, find office space, find industrial space. And so the strength to have the economy seems to be reaching more parts of the country.

JUDY WOODRUFF: So now let's talk about the stock market.

It also seems to be roaring. And we said a minute ago apparently it eighth straight record. What's going on there?

MARK VITNER: Well, recently, a lot of that has been in the tech sector, where we have had very good earnings.

And the stock market and the economy are somewhat reflecting the same thing. We had a slowdown in the global economy in 2015 and 2016, and the U.S. economy was outgrowing the rest of the world, and the dollar shot up in value.

That made it very tough for companies to boost their profit margins. Within the last year, we have seen that global demand picked up. And more than half of the earnings of the Fortune — of the S&P 500 come from overseas. And that stronger growth is translating into stronger profits, and that's what's taken the market up.

JUDY WOODRUFF: And we see that wages are finally beginning to pick up a little as well.

But what about — Mark Vitner, what about ordinary Americans? You still get the sense that many people say they don't feel they're part of this great boom, this recovery that's taking place.

MARK VITNER: Well, America is a vast country, and you have got people of all walks of life.

And so it's not surprising that a lot of people, and I would say most people, aren't really tied into the stock market, at least not directly. But I can tell you that companies are more likely to add workers and boost salaries and expand their operations when stock prices are going up than when they're going down.

When the stock market is going down and we're talking about eight straight losing sessions, actually longer than that, when we have a pullback that persists, there is a lot of pressure on corporate managers to find cost savings. And that's when — so a weaker stock market may show up to ordinary Americans a lot more directly than a stronger one shows up.

But ordinary Americans do benefit from a stronger stock market. Whether they do so directly, maybe not — even if they don't do so directly, they do benefit indirectly.

JUDY WOODRUFF: And it sounds as if you're saying, if they haven't felt it already, maybe they will feel it soon.

MARK VITNER: Well, I would certainly hope so.

I think that the improvement in the stock market — when the stock market goes up for odd reasons, then it probably doesn't mean that much. But when it goes up because the economy is improving, and we're seeing a broadening in the strength of the economy and earnings have improved, that's something that should benefit everyone.

JUDY WOODRUFF: Final question.

President Trump has said on a number of occasions that he deserves a lot of credit for this. How much does any president — how much credit does any president deserve when the economy booms?

MARK VITNER: My philosophy has always been give them credit when it's good and blame when it's bad, because they get all the blame when it goes bad.

But President Trump's policies are pro-growth. The problem is, is that none of those policies have really been enacted. The one area where the president has made progress has been lessening the load of regulation, and we see that in some of our surveys of small business, where the number of businesses that say that their number one problem is regulation has fallen substantially over the last six months.

And I think that has contributed to a little bit of the pickup that we're seeing in business-fixed investment.

JUDY WOODRUFF: Mark Vitner of Wells Fargo, it's nice to have a good report on the economy for a change. Thank you.

MARK VITNER: Glad we could help.

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