U.S. Added 128,000 Jobs in October; Unemployment at 3.6%

That divergence cannot continue forever. Eventually, either businesses will start to cut jobs, a surefire way to erode consumers’ confidence, or free-spending shoppers will set executives’ minds at ease and encourage them to ramp up production again.

“At some point in time, either the business sector has to come back or the consumer will falter,” said Diane Swonk, chief economist for the accounting firm Grant Thornton.

One reason for concern: Hourly wage growth has stalled recently, after rising last year. The length of the average workweek has also fallen slightly, particularly in manufacturing. Without more pay and more hours, it will be hard for consumers to keep spending more money.

The Long View

In October 2009, the unemployment rate hit 10 percent, the worst mark of the worst recession since the Great Depression. A decade later, the unemployment rate is hovering close to a 50-year low. There is no doubt that the economy has improved substantially during what is now the longest expansion in American history.

But by many measures, the labor market is still not as strong as at the peak of past economic cycles. A smaller share of working-age adults — particularly men — have full-time jobs, and wage growth has been slow.

“The question is always, ‘compared to what?’” said Oren Cass, a senior fellow at the Manhattan Institute, a right-leaning think tank. “We should certainly celebrate that the unemployment rate is low and that the expansion has gone on as long as it has.” At the same time, he said, “if you ask how does this look relative to 2006-2007 or 1999-2000, it just doesn’t look as good on almost any metric.”

Mr. Cass said the relative weakness was partly the result of long-term structural changes in the American economy. But it also suggests that there is room for further improvement if the expansion can continue. Jerome H. Powell, the Fed chair, has said that one reason policymakers are cutting interest rates is that the recovery is only now reaching people with criminal records, people with less education, or others who often face barriers to employment.