The American economy continues to surge ahead, though you won't read much about it in the mainstream media. Economic growth in the third quarter was 4.1 percent -- despite Hurricane Katrina! -- the 10th consecutive quarter with growth over 3 percent. Unemployment is 5.0 percent -- lower than the average for the 1970s, 1980s or 1990s.
Since April 2003, the economy has created a net 5.1 million new jobs. Core inflation is only 2.1 percent, and gas prices, which surged above $3 a gallon after Katrina, are now down around $2. Productivity growth for the five-year period of 2000-2005 is 3.4 percent, the highest of any five-year period in 50 years.
This is a remarkable performance and owes something surely to the Bush tax cuts and to Alan Greenspan's stewardship at the Federal Reserve. But it also tells us something broader about the American economy. Mainstream media coverage about the economy tends to be full of bad news, especially during Republican administrations, and to focus on economic problems. But over the longer term, the story of the American economy is one of success. A quarter century ago, many economic commentators said that the era of low-inflation, high-job-creation economic growth was over. In the ensuing 25 years, it has come to be the norm.
The negative bias of economic coverage can be seen in stories about the current No. 1 private sector employer in America, Wal-Mart, and the No. 1 private sector employer back in the 1970s, General Motors. The GM story is genuinely grim: The company is laying off thousands of workers and closing plants, and is threatened with bankruptcy. Stories about Wal-Mart tend to focus on allegedly low wages and healthcare benefits, and say less about the company's continual profitability and the low prices that benefit consumers. These companies are not entirely comparable -- they're in different businesses. But some of the differences between them illustrate why the American economy, which seemed to have run out of gas 25 years ago, is now doing so well.