This is a strange time to be debating whether capitalism is broken, at least in the United States.

The economy has added jobs every month since October 2010 for a total of over 20m net new payroll jobs. The unemployment rate is below 4%, lower than it has been since 1969. Wage growth is finally accelerating, clocking in at a rate well above 3% a year for typical workers.

The workforce participation rate for people ages 25 to 54 has increased by 1.6 percentage points since 2015, wiping out half a decade of decline. There are more job openings than unemployed workers in the US. The number of workers experiencing long-term unemployment is lower today than it was when the Great Recession began.

So much for a stagnant economy. What about inequality? A recent report from the nonpartisan Congressional Budget Office belies the general claims that economic divisions are rapidly widening. The CBO examined inequality on several measures: income generated in markets (employment, business and capital income); the sum of market income and payments from social insurance programs; and income with and without safety net benefits and services and before and after federal tax payments.

Across these different measures, inequality rose between 1979 and 2006 by between 24 and 28%, depending on the precise definition of income. (The report uses the standard “Gini coefficient” inequality measure.) But since 2007 inequality has leveled out or even declined. Market income inequality has increased by 3%; once government transfer payments and federal taxes are taken into account, however, inequality has actually narrowed by 5% over the last decade.

To be clear, I am more concerned about the absolute condition of low-income workers and households, as well as the opportunities available to them, than I am concerned about relative inequality. But if we are going to analyze inequality it is important that we base our analysis on the latest and best statistics.

Here, the US economy is delivering even better results. Since 2016, weekly earnings for the bottom 10% of full-time workers have grown more than 50% faster than for workers at the median. The unemployment rate for adults without a high school degree is further below its long-term average than the rate for college-educated workers.

Vulnerable workers are also benefiting from today’s economy. Employment rates are increasing for workers with a disability. In our low-unemployment environment, employers have become much more flexible about which applicants they will interview and which candidates they will hire. Some evidence and anecdotes suggest firms are less likely to require criminal background checks on applications, for example.

To repeat: an odd time, then, to be debating whether capitalism is a fundamentally broken economic system. Yet debating it we are, and not just in this newspaper. In the US, some Trumpian populists and their sympathizers are downplaying the importance of economic growth, warming to protectionism, and becoming comfortable with the damage the president is doing to the post-second world war liberal order. Some populists on the political right are stepping back from the traditional conservative emphasis on the importance of personal responsibility. Bizarrely, some are even questioning the merits of dual-earner families.

Frustrated by “the elites” in their own way, some populists on the left are eager to use the tax code to go after the wealth of the 75,000 US households worth more than $50m. Having special, punitive tax rules for 0.06% of US households is not just bad economics, it is morally objectionable. Fueled in part by populism, Democrats running for president are proposing a dizzying array of entitlement programs, including “Medicare for All”, free college tuition, the government paying off a large share of existing student loan debt, and universal childcare.

Populist frustration is a common thread here. The system isn’t working, many in both parties say. The elites have chased economic growth at our expense. Free trade may be good for the elites, but not for workers. Your financial and economic situation is not your responsibly – in fact, the game is rigged and there is nothing you can do to improve your lot. China is to blame. The wealthy are to blame. Harmful and irresponsible policies should be adopted.

This frustration didn’t materialize out of nowhere, of course. And current economic conditions provide an important argument in favor of capitalism, but are not necessarily conclusive. It is also not conclusive, at least in political debate, to point out that over the past three decades the inflation-adjusted wages of typical US workers have increased by 32% and median household income (after taxes and transfers, and adjusted for inflation) is up by 43%. Or to point out that the common experience over the past several decades has been for jobs to be available for those who want them, for consumers to enjoy more and better goods and services, for quality of life to improve, and for capitalism to help push the poverty rate down.

We must acknowledge head-on that longer-term, slower-burning economic trends have created real hardship for many US workers and families, including the labor market effects of technological change and, to a much lesser degree, globalization. These trends were exacerbated by the gut punch of the financial crisis and Great Recession. The recovery from the recession was long and painful for many workers, even if it is largely complete today.

In a recent study, economists Manuel Funke, Moritz Schularick and Christoph Trebesch analyzed more than 800 elections held between 1870 and 2014 in 20 advanced countries, including the US and UK. They found that populist parties saw a significant increase in their parliamentary vote share following financial crisis. This finding is not surprising to those of us in the US and UK who have been saturated by populist sentiment the past few years.

The economists also found that political upheaval subsides, typically within 10 years of the crisis. So I have some hope that continued economic growth and wage gains will be a balm to the populist irritation in coming years.

We will still have face important challenges, of course. Managing the effects of technological change and globalization are chief among them. Making sure workers have the skills they need to command high wages in a 21st-century economy is another. Increasing workforce participation, economic dynamism and labor market fluidity are others still. Clearing away harmful regulations and stopping the advance of damaging laws – eg, a $15 per hour federal minimum wage – is also high on the priority list.

These problems support a completely uncontroversial proposition: left on their own, markets do not create the kind of society in which we want to live. But no one is seriously arguing that they do. We have settled on a political economy in which regulated markets create wealth and prosperity, some of which is redistributed or spent by government to ensure socially desirable outcomes, with those outcomes defined through politics.

The basic structure of that system is sound. Retaining faith in it is itself a very important solution to the problems that the critics of capitalism are trying to address. Capitalism is not perfect. But it is certainly not broken, and we should not let a populist scream convince us that it is.