Not since 1969: Surprising similarities beyond jobless numbers

WASHINGTON >> The last time the U.S. unemployment rate was roughly as low as the 3.7 percent it is now — December 1969 — the economy was overheating, inflation was spiking and a short recession soon followed. Could that happen again? Probably not anytime soon, most economists say. Yet there are some surprising similarities between today’s economy and the late 1960s, when the unemployment rate remained mostly below 4 percent for four straight years.

The jobless rate, the government reported Friday, is now at its lowest level since the 3.5 percent it reached 49 years ago. And the strength looks likely to endure. There are a record number of open jobs, consumers are confident and economic growth has been brisk. America’s economic expansion is now the second-longest on record, having already surpassed the boom of the 1960s.

Despite the similar jobless rates, the economy then was very different and by some measures stronger. Nearly a third of U.S. jobs were in manufacturing, which provided solidly middleclass pay and benefits. Prosperity was more broadly shared, with less economic inequality.

It’s a period that is frequently recalled with nostalgia, although racial and ethnic barriers, educational disparities and institutional sexism prevented many millions of Americans from participating in it.

“Prosperity has become the normal state of the American economy,” a White House report in 1969 said.

Incomes, even after accounting for taxes and inflation, jumped 7 percent in 1964, the best showing of that decade. The biggest annual gain in the current decade, so far, was just 4.2 percent in 2015.

“A family could afford to live on one income and own a house and a car,” said Diane Swonk, chief economist at Grant Thornton, a tax advisory firm. 1969 >> PAGE 2

AP PHOTO/LYNNE SLADKY, FILE Job applicants speak with representatives from Aldi at a job fair hosted by Job News South Florida, in Sunrise, Fla.