A phone in a Xiaomi shop in Tianjin, China on Jan. 8, 2018.
Zhang Peng—LightRocket/Getty Images
By Alan Murray and David Meyer
July 9, 2018

Good morning.

It’s worth taking a moment this Monday to savor the sweet state of the U.S. economy. Economic output in the second quarter is cooking at roughly a 4% rate, and jobs are abundant. Friday’s jobs report showed employers added a hefty 213,000 to payrolls last month. Unemployment is near historic lows, for workers of all ages and backgrounds.

Yet the signs of overheating that one might expect given such conditions are nonexistent. Unemployment actually rose during June—to 4% from 3.8%—a good thing, because it reflected a flood of workers returning to the labor market. Average hourly earnings for private workers rose 2.7% from a year earlier—decent, but not enough to stoke fears of inflation. Interest rates on 10-year notes—after jumping above 3% earlier in the year—have settled back close to 2.8%, suggesting credit continues to flow freely. Even the President’s favorite economic indicator—the trade deficit—is shrinking, defying expectations (although it may have been helped in June by a surge of soybean exports, as the Chinese soaked up global supplies before new tariffs took hold).

Economists like to say that expansions don’t die of old age—a notion that belies the fact that all previous expansions, save one, have indeed died before reaching the age of this one. Nevertheless, the ability of this expansion to seemingly rejuvenate itself is noteworthy. If the U.S. can manage another two or even three years without recession, all sorts of good things will follow.

President Trump deserves some significant credit for this state of affairs. His election clearly stirred animal spirits, his rollback of business regulation has definitely helped, and the tax cut that he made possible is feeding short-term growth. It’s also worth noting the President has engineered the largest storm cloud threatening this sunny horizon—a trade war that, while small for the moment, has cast an unfortunate pall over business investment plans.

For the economy to get full benefit from the current period of prolonged growth, businesses need to take the opportunity to invest in the future—and resist the temptation to push stock buybacks beyond already record levels. There is a new industrial revolution in the works. The future will favor those who act boldly now.

More below.

Alan Murray
@alansmurray
alan.murray@fortune.com

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