Econ Vital Signs

   Companies are hiring, unemployment is steady, the trade deficit is falling as exports outpace imports, and consumer spending is up.
   The question for the Federal Reserve now is whether to tap the monetary brakes to prevent a sharp acceleration of growth or to keep watching as the statistical vital signs show a reasonably healthy economy.
   The Department of Labor said total nonfarm employment increased by 151,000 in August. The unemployment rate remained at 4.9 percent for three months in a row, while the number of unemployed persons was unchanged at 7.8 million. Both measures have shown little movement over the year, the agency said.

   Separately, the Department of Commerce reported an 11.6 percent drop in the international trade deficit in July from June, to $39.5 billion. Exports increased by 1.9 percent to $186.3 billion and imports were off by 0.8 percent, to $225.9 billion.
   Employee compensation topped $10 billion for the first time in the second quarter, according to the Commerce Department's Bureau of Economic Analysis, and total output of goods and services (Gross Domestic Product) rose by 1.1 percent in the second quarter ended June 30. Measured in current dollars, the U.S. now produces some $18.4 trillion worth of stuff yearly.

   So despite the warnings of continuing economic disaster by some candidates, the numbers show a different story. The American economy continues its slow but steady recovery from the Great Recession that ended eight years ago, and now the issue is to be careful it does not kick up too fast, causing a danger of relapse.
   That's part of the Fed's mandate, and its primary tool in doing that is controlling the money supply, which it does by attempting to manipulate interest rates. Whether the central bank is successful in this endeavor, however, is another issue. And if it causes too much of a change too quickly, the result could be another stumble. Moreover, with its key interest rate already near zero, the Fed has little room to stimulate growth any more than it has.
   Final diagnosis: The U.S. economy is reasonably healthy and is growing slowly. But be careful.