America’s economic recovery has been one of the slowest in history, and it doesn’t seem like it’s going to pick up any time soon. But why? What can we do about it? And how do we fix our financial future? While the above questions are complex and there’s no silver bullet, this article explores ten surprising things that you didn’t know about America’s economic recovery in order to shed light on some of the problems, and possible solutions, facing our country today. #1 …
1) The Federal Reserve is keeping interest rates low
The Federal Reserve is making a huge impact on the economy. The Federal Reserve is the institution that sets interest rates in the United States, and they are currently keeping them low. When interest rates are low, it makes it cheaper for people to borrow money from banks. This means that more people can start their own businesses or buy homes because they have cheaper access to credit. In addition, low interest rates make it possible for people to get loans for big purchases like cars and appliances.
2) The budget deficit is shrinking
The budget deficit is shrinking, which means the country’s finances are improving. The debt-to-GDP ratio has fallen below 80% for the first time in six years. The unemployment rate has been falling since 2009 and fell to 7.3% in September 2013–the lowest level since 2008.
3) Unemployment is falling
Unemployment is falling, but it’s not clear if that is a good sign. One thing to note is that the unemployment rate only measures those who are actively seeking work, and not those who have stopped looking. The labor force participation rate has fallen since the recession, meaning many people who could be working aren’t because they’ve given up hope of finding a job. This does not bode well for our future economic recovery.
4) Wages are rising
- Wages are rising. The US Bureau of Labor Statistics released data showing a 2.9% increase in wages for the 12 months ended in September 2018. This is the highest wage growth rate on record since 2009.
- Wage growth has been consistently stronger for people with more than a high school diploma compared to those without.
- The unemployment rate is at its lowest point in five decades, at 3%.
5) The stock market is booming
The stock market is booming. The Dow Jones Industrial Average has reached record heights, and the Standard and Poor’s 500 index is at its highest level since 1998. What does this mean for you? It means that if you have a portfolio of stocks, it’s time to start feeling confident about your future.
6) Manufacturing is rebounding
Manufacturing is rebounding and is now the fastest-growing part of the economy. After shedding jobs for a decade, manufacturers have added 533,000 positions since 2009. Manufacturing output is at a 12-year high, and manufacturing grew faster than the overall economy in 2012 for the first time in three decades.
7) Housing is recovering
Housing is recovering. Home prices are rising, but they’re still below their peak. The median price of a new home sold in June was $289,200, which is less than the all-time high of $306,800 set in July 2007. That doesn’t mean there aren’t signs of improvement: In just five years, the number of first-time home buyers has more than doubled and more people are moving to urban areas.
8) The trade deficit is narrowing
The trade deficit is narrowing, which means that America is importing less goods than it exports. This decrease in the trade deficit should have a positive effect on GDP. However, there are other factors that need to be taken into account in order to get an accurate picture of the economy. For example, if business investment is down because firms are not producing as much goods due to an increase in uncertainty, then the trade deficit will not necessarily have a positive effect on GDP.
9) The federal government is spending less
The federal government is spending less because the deficit has been shrinking due to lower spending and higher taxes. It has shrunk from 10% of GDP in 2010 to 2% of GDP. Many economists have said that it will shrink by another 1% over the next few years.
10) The economy is growing
The U.S. economy has been growing for five years straight, which is the first time that has happened since 2005. The economy grew at a rate of 5% in the third quarter of 2014 and 3.6% in the fourth quarter, marking its fastest growth in six years.