The US economy has deteriorated over the last year as badly as at any time in recent history outside a global recession. That is the assertion which started this series here on 16th March.
Since then, social media comments on these articles have revealed profound hostility to this reality. The resistant weeds of Trumpian tweets claiming that “his” economy is “best ever” or “best in the world” have found fertile soil and may be difficult to uproot.
But the data proves the US economy is performing poorly on 22 of the 26 key variables. This has nothing to do with the coronavirus. These outcomes were recorded before that threat emerged.
We have assembled the 26 variables into four levels: A. doing very well; B. about average; C. below average; and D. tracking disastrously.
Here, to summarise, are the demonstrable facts, with links to the data:
A. Sectors of the US economy performing very well
This category is for outcomes showing strength relative to earlier periods, and high global ranking. Currently, there are none.
B. Sectors showing average or above average outcomes
Four are now tracking fairly well, as discussed in more detail here:
1. The jobless rate has declined to 3.52%.
2. Youth unemployment is down to 7.7%.
3. Median wealth per adult, increased to $65,904 in 2019, up 2.95%.
4. Personal savings is currently 7.9% of disposable income.
C. Below average outcomes
Fourteen are below par:
1. Interest rates, down to the rock bottom target range 0 to 0.25%.
2. Inflation is above optimum at 2.3%.
3. Wages growth remains below inflation for most workers.
4. Labor underutilization increased to 7.0% in February, the highest in five months.
5. Consumer spending increased in December by 2.63%, barely keeping pace with inflation.
6. Annual GDP growth for the 2019 fourth quarter was a lowly 2.33%, ranking 102nd globally, close to the lowest ever.
7. GDP per person PPP is US$55,681, ranking a lowly 12th in the world.
8. The housing index slipped back to 0.36% in 2019, the lowest since the great recession.
9. Mining production has declined in real terms for four consecutive months.
10. Corruption now ranks a miserable 23rd in the world – with a score of 69, the lowest in eight years.
11. Homelessness in 2019 increased by almost 15,000.
12. The retail and wholesale sectors continue to experience widespread bankruptcies and job losses.
13. Industrial production has copped six straight months of zero or negative growth.
14. Tourism revenue in 2019 fell in dollars by 0.7% to $254.2 billion, a fall of about three per cent in real terms.
D. Disastrous outcomes
Eight variables are now close to the worst in US history, or relative to other developed countries, or both.
1. Manufacturing: factory output has fallen to the lowest level since this series started.
2. Exports have collapsed disastrously since the 2018-19 trade wars were fought and lost. Since 2016, US export growth has been among the developed world’s lowest. See chart, above.
3. The trade deficit has been deeper than $45 billion for 26 of the last 28 months.
4. Government spending is at an unsustainable record high.
5. Government revenue is currently tracking at an appalling 69.3% of spending.
6. Budget deficits continue to balloon.
7. The federal debt is up $3.7 trillion since Trump’s inauguration to $23.69 trillion.
8. Interest payable on the debt now comes to $4,369 per taxpayer per year.
We shall return shortly to ponder why these plain facts seem so little understood across the USA, including by economists, among business and economics writers, and within the Democratic Party.
We may then update this list from time to time, as variables shift from one category to another. Unfortunately, with the health crisis worsening, the shifts are likely to be from average to poor, and from poor to disastrous. We shall see.