Add news
March 2010 April 2010 May 2010 June 2010 July 2010
August 2010
September 2010 October 2010
November 2010
December 2010
January 2011
February 2011 March 2011 April 2011 May 2011 June 2011 July 2011 August 2011 September 2011 October 2011 November 2011 December 2011 January 2012 February 2012 March 2012 April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 October 2012 November 2012 December 2012 January 2013 February 2013 March 2013 April 2013 May 2013 June 2013 July 2013 August 2013 September 2013 October 2013 November 2013 December 2013 January 2014 February 2014 March 2014 April 2014 May 2014 June 2014 July 2014 August 2014 September 2014 October 2014 November 2014 December 2014 January 2015 February 2015 March 2015 April 2015 May 2015 June 2015 July 2015 August 2015 September 2015 October 2015 November 2015 December 2015 January 2016 February 2016 March 2016 April 2016 May 2016 June 2016 July 2016 August 2016 September 2016 October 2016 November 2016 December 2016 January 2017 February 2017 March 2017 April 2017 May 2017 June 2017 July 2017 August 2017 September 2017 October 2017 November 2017 December 2017 January 2018 February 2018 March 2018 April 2018 May 2018 June 2018 July 2018 August 2018 September 2018 October 2018 November 2018 December 2018 January 2019 February 2019 March 2019 April 2019 May 2019 June 2019 July 2019 August 2019 September 2019 October 2019 November 2019 December 2019 January 2020 February 2020 March 2020 April 2020 May 2020 June 2020 July 2020 August 2020 September 2020 October 2020 November 2020 December 2020 January 2021 February 2021 March 2021 April 2021 May 2021 June 2021 July 2021 August 2021 September 2021 October 2021 November 2021 December 2021 January 2022 February 2022 March 2022 April 2022 May 2022 June 2022 July 2022 August 2022 September 2022 October 2022 November 2022 December 2022 January 2023 February 2023 March 2023 April 2023 May 2023 June 2023 July 2023 August 2023 September 2023 October 2023 November 2023 December 2023 January 2024 February 2024 March 2024 April 2024 May 2024 June 2024
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
23
24
25
26
27
28
29
30
News Every Day |

The U.S. Economy Is Absolutely Fantastic

If the United States’ economy were an athlete, right now it would be peak LeBron James. If it were a pop star, it would be peak Taylor Swift. Four years ago, the pandemic temporarily brought much of the world economy to a halt. Since then, America’s economic performance has left other countries in the dust and even broken some of its own records. The growth rate is high, the unemployment rate is at historic lows, household wealth is surging, and wages are rising faster than costs, especially for the working class. There are many ways to define a good economy. America is in tremendous shape according to just about any of them.

The American public doesn’t feel that way—a dynamic that many people, including me, have recently tried to explain. But if, instead of asking how people feel about the economy, we ask how it’s objectively performing, we get a very different answer.

Let’s start with economists’ favorite metric: growth. When an economy is growing, more money is being spent. More stuff is being produced, more services are being performed, more businesses are being started, more workers are being hired—and, because of this abundance, living standards are probably rising. (On the flip side, during a recession—literally, when the economy shrinks—life gets materially worse.) Right now America’s economic-growth rate is the envy of the world. From the end of 2019 to the end of 2023, U.S. GDP grew by 8.2 percent—nearly twice as fast as Canada’s, three times as fast as the European Union’s, and more than eight times as fast as the United Kingdom’s.

[Rogé Karma: What would it take to convince Americans that the economy is fine?]

“It’s hard to think of a time when the U.S. economy has diverged so fundamentally from its peers,” Mark Zandi, the chief economist at Moody’s Analytics, told me. Over the past year, some of the world’s biggest economies, including those of Japan and Germany, have fallen into recession, complete with mass layoffs and angry street protests. In the U.S., however, the post-pandemic recession never arrived. The economy just keeps growing.

chart showing cumulative real GDP growth in the G7, 2019 Q4-2023 Q4
Source: Briefing Book

Still, growth is a crude measure that says very little about people’s day-to-day lives. Perhaps the right question to ask is: Are most Americans better off financially than they were before the pandemic?

One school of thought maintains that the answer is no, because of the rising cost of living. Thanks to three years of higher-than-usual inflation, just about everything costs more than it did before the pandemic.

Price increases on their own, however, can’t tell us if the cost of living has gone up. What really matters is the relationship between how expensive things are and how much money people have to spend on them. As Vox’s Eric Levitz recently pointed out, prices have increased by 1,400 percent since 1947; that doesn’t mean Americans have less buying power today than at a time when a third of the country didn’t have running water and 40 percent lived in poverty. That’s largely because incomes have increased by 2,400 percent over the same stretch. If prices go up but people’s incomes go up faster, then the cost of living decreases. And that is exactly what has happened in the U.S. over the past five years.

It took some time. When inflation was at its worst, in late 2021 and 2022, prices were rising too fast for workers’ pay to keep up. Over the course of 2023, however, the rate of inflation plummeted while wages kept rising. According to calculations by the economist Arindrajit Dube, prices rose about 20 percent from the beginning of the pandemic to the end of 2023—but the median worker’s hourly wages had increased by more than 26 percent. In other words, a dollar in 2024 might not go as far as a dollar in 2019, but today the average worker has so many more dollars that they can afford a higher quality of life.

Some experts dispute this. Loretta Mester, the president of the Cleveland Federal Reserve, recently told The New York Times that wage growth hadn’t kept pace with inflation, citing an indicator that tracks changes in compensation within particular industries. But one of the most common ways for workers to get a raise is to move between industries, from lower- to higher-paying occupations—the way someone working as a fry cook, say, might next take a job as a package-delivery driver. Basically every other measure of worker pay shows that wages adjusted for inflation are higher today than they were before the pandemic. Dube’s calculations are particularly reliable because they are based on a dataset that tracks wages for individual workers over time.

Other nations probably wish they had the luxury of debating such technicalities. From the beginning of the pandemic through the fall of 2023, the last period for which we have good comparative data, real wages in both Europe and Japan fell. In Germany, workers lost 7 percent of their purchasing power; in Italy, 9 percent. By these metrics, the only workers in the entire developed world who are meaningfully better off than they were four years ago are American ones.

Chart showing change percentage in Earnings 2019 Q3 to 2023 Q3
Source: US Department of the Treasury

Averages can conceal a lot, of course. The rise in inflation-adjusted wages, which economists call “real wages,” might not be such good news if it were flowing mostly to the already-wealthy, as it did during the recovery from the Great Recession. In fact, from 1964 through 2018, real wages for most workers hardly budged; almost all gains went to the richest Americans. In the early days of the pandemic, when millions of low-income workers found themselves suddenly out of a job, it would have been reasonable to expect the same trend to play itself out.

Instead, the opposite happened. A recent analysis from the Economic Policy Institute found that from the end of 2019 to the end of 2023, the lowest-paid decile of workers saw their wages rise four times faster than middle-class workers and more than 10 times faster than the richest decile. A recent working paper by Dube and two co-authors reached similar conclusions. Wage gains at the bottom, they found, have been so steep that they have erased a full third of the rise in wage inequality between the poorest and richest workers over the previous 40 years. This finding holds even when you account for the fact that lower-income Americans tend to spend a higher proportion of their income on the items that have experienced the largest price increases in recent years, such as food and gas. “We haven’t seen a reduction in wage inequality like this since the 1940s,” Dube told me.

Pay in America is becoming more equal along race, age, and education lines as well. The wage gap between Black and white Americans has shrunk to its lowest point since at least the 1980s. Pay for workers younger than 25 has increased twice as fast as older workers’ pay. And the so-called college wage premium—the pay gap between those with and without a college degree—has shrunk to its lowest measure in 15 years. (The gender pay gap has also narrowed slightly, but far less than the others.)

What explains this sudden boost in lower- and middle-class wages? The answer lies in the post-pandemic American labor market, which has been unbelievably strong. The unemployment rate—defined as the percentage of workers who have recently looked for a job but don’t have one—has been at or below 4 percent for more than two years, the longest streak since the 1960s. Even that understates just how good the current labor market is. Unemployment didn’t fall below 4 percent at any point during the 1970s, ’80s, or ’90s. In 1984—the year Ronald Reagan declared “It’s morning again in America”—unemployment was above 7 percent; for most of the Clinton boom of the 1990s, it was above 5 percent.

The obvious upside of low unemployment is that people who want jobs can get them. A more subtle consequence, and arguably a more important one, is a shift in power from employers to workers. When unemployment is relatively high, as it was in the years immediately following the 2008 financial crisis, more workers are competing for fewer jobs, making it easier for employers to demand higher qualifications and offer meager pay. That’s how you end up with stories about college graduates working as baristas for $7.25 an hour. But when unemployment is low and relatively few people are looking for jobs, the relationship inverts: Now employers have to compete against one another to attract workers, often by raising wages. And—this is the crucial part—these dynamics affect all workers, not just people who are out of a job.

This helps explain what happened after the pandemic. When the economy first reopened, employers suddenly had to fill millions of positions. Meanwhile, workers—flush with stimulus checks and expanded unemployment insurance—could afford to say no to bad jobs. In response, even famously low-paying companies such as Amazon, Walmart, and McDonald’s started raising wages and offering new benefits to attract employees. What was misleadingly labeled the “Great Resignation” was really more of a great reshuffling, as record numbers of workers quit a job to take a better-paying one. Over the next couple of years, as American consumers kept spending money, demand for labor stayed high. “Low-wage workers are finally getting a small taste of the bargaining power that highly paid professionals experience most of the time,” Betsey Stevenson, a labor economist at the University of Michigan, told me.

[Derek Thompson: Three myths of the Great Resignation]

So far we’ve been talking about wages: the money people are paid by their employer. To better capture overall financial well-being, we might instead look at household wealth, which takes into account the full range of people’s debts and assets. Over the past few years, Americans have experienced the biggest surge in wealth in at least three decades.

The gold standard for research into the state of Americans’ finances is the Federal Reserve’s Survey of Consumer Finances, released every three years. The most recent report found that, from 2019 to 2022, the net worth of the median household increased by 37 percent, from about $141,000 to $192,000, adjusted for inflation. That’s the largest three-year increase on record since the Fed started issuing the report in 1989, and more than double the next-largest one on record. (According to preliminary data from the Fed, wealth continued to rise across the board in 2023.) Every single income bracket saw net worth increase considerably, but the biggest gains went to poor, middle-class, Black, Latino, and younger households, generating a slight reduction in overall wealth inequality (though not nearly as steep a reduction as the decline in wage inequality). By comparison, median household wealth actually declined by 19 percent from 2007 to 2019.

An important caveat to the wealth statistics is that much of the recent increase came from the surge in home prices. A family that’s wealthier on paper might not feel rich if they would have to sell their home to realize any gains—especially if all the places they might want to move to have gotten similarly expensive.

Indeed, the out-of-control cost of housing is perhaps the biggest black mark on an otherwise excellent economy. This problem started decades ago—since the 1980s, the median U.S. home price has increased by more than 400 percent, twice as fast as incomes—and got even worse during the pandemic, as the rise of remote work prompted millions of people to seek more space. Those rising prices have collided with higher interest rates to produce the most punishing housing market in at least a generation. Would-be homeowners can’t afford to buy, and many existing homeowners feel stuck in place.

Housing is one of several crucial categories, along with childcare, health care, and higher education, that have ballooned in cost in recent decades, putting a middle-class lifestyle further and further out of reach—what my colleague Annie Lowrey has called the “Great Affordability Crisis.” The past few years of high interest rates, which make borrowing money more expensive, have jacked up costs even more. And despite the recent good news, the U.S. still has lower life expectancy and much higher levels of inequality, poverty, and homelessness than other wealthy nations. For millions of people, getting by in America was a struggle before the pandemic and continues to be a struggle today.  

Still, that doesn’t change the fact that the U.S. economy has had a remarkable four-year run, judged against both its own history or the international competition. A few years of good news isn’t enough to make up for 40 years of rising inequality and stagnant wages. But it’s a whole lot better than the alternative.

Здоровье

Есть или не есть кровянку, прокомментировал гастроэнтеролог Садыков

Bradley Wiggins accused of ‘trashing’ posh VW campervan as pals say bankrupt cyclist has sold his medals and shirts

Frustrated England stars including Kane and Bellingham consoled by Wags and family in stands after tame Denmark draw

PGA Tour Commissioner Jay Monahan shuts down Saudi agreement rumors: “complex scenario”

Sophie Turner Keeps it Glam While Attending Grand Opening of Peninsula London

Ria.city






Read also

Liverpool planning talks with La Liga club over winger more frightening than Bakayoko – report

Andrew Vaughn Player Props: June 22, White Sox vs. Tigers

The ‘M3GAN’ cinematic universe expands, all rejoice

News, articles, comments, with a minute-by-minute update, now on Today24.pro

News Every Day

Bradley Wiggins accused of ‘trashing’ posh VW campervan as pals say bankrupt cyclist has sold his medals and shirts

Today24.pro — latest news 24/7. You can add your news instantly now — here


News Every Day

Bradley Wiggins accused of ‘trashing’ posh VW campervan as pals say bankrupt cyclist has sold his medals and shirts



Sports today


Новости тенниса
Кирилл Скачков

Кирилл Скачков из Новокузнецка стал победителем Игр стран БРИКС-2024



Спорт в России и мире
Москва

Резидент «Инсайт Люди» Дмитрий Зубов установил мировой рекорд по чеканке мяча



All sports news today





Sports in Russia today

Москва

В УФСИН России по Республике Дагестан прошли лично-командные соревнования по легкой атлетике


Новости России

Game News

BarbarQ 2 вошёл в стадию ЗБТ на Android в Китае


Russian.city


Москва

За прошедшую неделю подмосковные росгвардейцы обеспечили безопасность более 200 мероприятий


Губернаторы России
Кубок

В Пензе стартовали соревнования по по мотокроссу на Кубок главы города


Показ мод, объединивший европейские и африканские мотивы, стал ярким событием вечерней программы фестиваля «Планета Юго-Запад»

Директор Росгвардии генерал армии Виктор Золотов принял участие в посвященных 100-летию дивизии имени Ф.Э. Дзержинского торжественных мероприятиях

Политолог Марков рассказал, что российский боец MMA Джефф Монсон принял ислам

Проект Детского радио – победитель второго грантового конкурса Президентского фонда культурных инициатив


Хирург Володченков: у певицы Агузаровой не видит глаз из-за неудачной пластики

Жанну Агузарову -награждённую титулом «Легенда вне времени» вырезали

Жанну Агузарову вырезали из трансляции МУЗ-ТВ

Сказка Ульгэра «Волшебные башмачки Элли» по мотивам знаменитой сказки Александра Волкова «Волшебник Изумрудного города» - Театр и Цирк, Культура и Концерт, Россия и Дети


Рублёв и еще два российских теннисиста не сыграют на Олимпиаде в Париже

Теннисисты Медведев и Рублев сохранили позиции в рейтинге ATP

Кирилл Скачков из Новокузнецка стал победителем Игр стран БРИКС-2024

Лучший теннисист Казахстана узнал позицию в обновленном рейтинге ATP



СЕНСАЦИОННЫЙ ДОКЛАД ПРО ДЕЛО СКРИПАЛЕЙ, САФРОНОВА, ГОЛУНОВА.

Филиал № 4 ОСФР по Москве и Московской области информирует: Отделение СФР по Москве и Московской области выплатило единовременное пособие при передаче ребенка на воспитание в семью 474 семьям региона

Галина Ржаксенская впервые стала участником ПМЭФ в Санкт-Петербурге

В России запустили бесплатного цифрового ЗОЖ-помощника


Социальные и ESG-проекты ГПМ Радио названы лучшими в России

Почти 40 пар поучаствовали в турнире по конкуру на Кубок Гагарина в Щелкове

В рейтинге развития Тамбовская область за 2023 год опустилась на три места

Сергей Собянин: Активно укрепляем отношения с Китаем


Новицкого, намеревавшегося похитить деньги пенсионеров, отправили под домашний арест

В Астане загорелся 26-этажный небоскреб

Басков поцеловал в губы жену Александра Реввы

ВДНХ приглашает подростков в проектную школу «Каскад»



Путин в России и мире






Персональные новости Russian.city
Элджей

Рэпер Элджей выступил на фестивале «Черника Fest Music» в Новосибирске



News Every Day

PGA Tour Commissioner Jay Monahan shuts down Saudi agreement rumors: “complex scenario”




Friends of Today24

Музыкальные новости

Персональные новости