What is the current economy of the USA?

Mudassir Ali
Apr 15, 2020 08:20 AM 0 Answers
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What is the current economy of the USA?

Mudassir Ali
- Apr 15, 2020 08:20 AM

Originally Answered: How is the United States economy doing today?

I’ll try to address this issue calmly and objectively:


Most young Quorans don’t have a very good grasp of economics and the devastating effect Obama has had on the job market in the last eight years.

Unemployment Number

The Bureau of Labor Statistics U 3 number, commonly called the unemployment number, is not a good gauge. The current figure, 4.3%, makes for a good headline. However there is a problem with using this figure as an economic bellwether. If you get discouraged, and stop looking for a job, you are no longer counted.

BLS Jobs Number

On the first Friday (usually) of every month the BLS publishes the jobs number which the media, breathlessly, reports. They don’t bother (I suspect they don’t know) putting the number in context beyond what happened the previous month:

There are jobs, and then there are jobs. The jobs number gives equal weight to a part time barista making $20,000/year and a full time software programmer making $200,000/year.

Economist Alan Kruger, Obama’s former head of the Council of Economic Advisors, said, “We were surprised to learn that, in the last decade, 94% of the jobs created were not traditional full time jobs.” Whoops! (Now you know why your older brother, who just graduated from South Podunk U with $35,000 in student loan debt, is selling Nike’s at Dick’s Sporting Goods.)

The May 138,000 number was disappointing. (It takes 150,000 jobs to just keep up with the new people entering the job market each month.)

Last year when Obama was president the press would report “155,000 jobs created.” There would be screams of joy. The White House would put out a statement of how well the recovery was progressing. That number represented 5,000 NET new jobs—pathetic.

Thirty years ago, when the population of the US was 100,000,000 less, the jobs numbers were ROUTINELY 500,000 monthly.

Gross Domestic Product

If the U 3 number gets too much attention, this number gets too little attention. During the last eight years there was never a year of 3% GDP growth. (Obama scored another first ever with his presidency.) The difference between 1.4% (Obama) and 3% (average) GDP is huge. GDP measures, among other things, capital formation and productivity. Government policy matters.

Back in the 1980’s it took Reagan four years to reenergize the economy after the mess he inherited from Carter. It is way too early to start disparaging (or praising) a Trump economy.

What there is—is a spirit of optimism in the business community brought about by the Trump administration. Trump is promising, tax reform, cutting regulations, renegotiating NAFTA, and eliminating some of the job killing aspects of ObamaCare. Businessmen like what they are hearing.

I wasn’t a Trump supporter, but if he gets what he wants through Congress, I’m betting the jobs situation is going to get much better. If Trump has a year of 3% GDP growth in the next four years, he can be said to have revived this anemic economy.

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