America’s Economy

America’s Economy is the world’s wealthiest and most powerful.  Even macro-economists find it challenging to picture this as it is just so large.  But the numbers speak for themselves. Since 1871 America has been the world’s largest economy.  Indeed in 2018 it was measured at $20.58 trillion in 2018 in nominal terms.

For comprehension purposes the only way even macro-economists can fathom this enormity is by looking at GDP and labor force numbers as well as trade balances.

So let’s now look at trade balances.  Last year goods and services trade deficit was valued at $616.8 billion; imports – $3.1 trillion and exports – $2.5 trillion – not the best figures.  Adding insult to injury the trade deficit just for goods was $866 billion.

However, there was still a decline in the overall trade deficit for America in 2019 so that is definitely a good sign. Moreover, the US’s goods deficit with China declined too. Still, experts believe that many more stringent policies must be put in place to further reduce the deficit.

Recharge Your Community’s Economy

Four one-day workshops are being offered – at no fee – by Native American Development Corporation, Rural Community Assistance Corporation and the People’s Partner for Community Development. The first one is next week, March 24.  This will be followed by April 28, May 12 and June 16 – each one will follow from the one before and will last for 6 hours.

To be held at the Charging Horse Casino Bingo Hall (on East U.S. Highway 212), they will start at 9am and finish at 3pm.  The subjects covered include: an analysis of where the economy is today; pinpointing emerging economic opportunities for the future; how to select the right leaders who are best equipped to respond to those opportunities; a development of plans to make those visions a reality.

US Economy: Growth Industries

The cement industry in America seems to be faring well. One measuring tool is cement consumption and right now it has been relatively high. What’s more is that experts anticipate it will continue to grow (albeit modestly) over the next few years.  As Portland Cement Association’s Senior VP and Chief Economist Ed Sullivan pointed out:

“The economy doesn’t have the zip and the vigor that it had 10 years ago, and so what we’re seeing is the economy’s now in late stages of economic growth and recovery. That suggests that overall growth is going to start to slow, which is reflected in a slowdown in GDP numbers. It’s also reflected in our slow-down in job creation numbers.”

Sullivan added that both job creation and consumer sales numbers have not plummeted at all which is also a good indicator of stabilization and continued growth as well as an increase in home prices.

There have been some upturns in solar job industry following a dip in employment in the industry.  Employment in the solar industry jumped by 2.3 percent in 2019 and 5,600 jobs were added during the same time frame.  In addition, 31 states had an increase in solar jobs in 2019.

America is currently harboring an overwhelmingly huge debt right now, owing more than four times what it did just two decades ago. oXYGen Financial founder and CEO Ted Jenkin said:

“Like any budget that you have in your household, we have too little income and too many expenses. [However, this could have valuable significance for the consumer.  It doesn’t look like interest rates will increase all that much in the short-term since if they did reach 6 percent or over] the net interest on the debt in our fiscal deficit would actually be the No. 1 line expense on our budget.”

But is this really the case?  If – as Jenkins would have us believe – the consumer is in a better position now, how come the recorded number of new vehicles purchased was lower last year than in previous years. According to research from Cox Automotive, Edmunds and J.D. Power/LMC Automotive, there was a 1 percent decrease in sales from 2019 as compared to 2018 – the lowest in sales since the 2014 figure of 16.5 million.

President of Americas Operation and Global Vehicle Forecasting Jeff Schuster said:

 “Despite a lot of noise and some uncertainty with light-vehicle sales, 2019 has turned out to be a strong year. Much of that uncertainty has dissipated with USMCA nearly across the finish line, the progress with the China trade deal and an economy that is expected to be supportive.”

Trump supporters also believe that this will help business leaders believe that any bolster in consumerism will lead them to put faith in politicians for the upcoming 2020 election.

2020 Economic Outlook

The outlook for 2020 for the US economy is overall good, according to key indicators including: interest rates, stock market, consumer expectations, inflation, employment and, in particular GDP rate as that is an accurate indicator of America’s production output.  However, others have suggested a reduction from the 2019 2.2 percent figure to 2 percent this year. Indeed since 2017, real GDP growth was actually higher than average with a 2.5 percent figure for each calendar year.  This was mainly attributed to fiscal stimulus.

With Trump’s promise to boost advancements in the economy to 4 percent which is extremely fast, and – some would say – even too fast leading to overconfident consumerism. This could then result into a problematic boom and ultimate bust to the economy.  Indeed, there has been a marked growth spurt in the nation’s economy, especially as compared to other developed economies.

The dollar is also encountering a safety net, similar to the Swiss franc and Japanese yen.  This means that investors will more likely want to put money into US bonds and stocks.  There is an anticipated 3 percent growth within the next two years of the US dollar.

US Economic Ebbs and Flows

America’s economy has been indicating signs of solidity despite minor downturns reported in the third quarter.  While economists had indicated concern over a GDP dropoff, the ongoing US-China trade war did little for confidence in the business sector. 

With a 1.9 percent economic expansion in the summer, this figure – released by the Commerce Department – exceeded expectations.   According to Executive Director of US Economics Advisers, Ben Herzon:

“If I saw cracks in the consumer sector, I would be worried, but I don’t see that yet. The economy is not slowing into a recession.”

There was a definitive decline in business investment, research and development – 3 percent – as well as 15.3 percent drop in office and factory expenditure.

Economic Optimism: News and Views

What are people’s thoughts on the current status of the US economy?  Is there more of a leaning toward optimism or pessimism? Here we take a brief look.

According to a June study from the NFIB (National Federation of Independent Business), people are pretty optimistic about the economy. The finding was that:

 “While optimism remains at historically high levels, the June figure reverses the gain posted in May, with six components falling, three improving, and one unchanged. The Uncertainty Index rose substantially, increasing seven points to the highest level since March 2017. Last month, small business owners curbed spending, sales expectations and profits both fell, and the outlook for expansion dampened. When you add difficulty finding qualified workers and harmful state-level laws and regulations, you’re left with a volatile mix where uncertainty has increased to levels not seen in more than two years.”

Vis-à-vis employment in Mid-America, according to Ernie Goss, PhD, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business, Omaha, Nebraska:

“Since December of 2018, the national employment growth rate has been approximately three times that of the region. Not surprisingly, approximately 40 percent of supply managers reported the shortage of qualified workers was the greatest economic challenge for their company for the next 12 months,” Goss said. “Due to shortages of workers in the region, U.S. Labor Statistics data show that the average regional hourly wage rate rose by 4.8 percent over the past 12 months, well above the national gain of 3.1 percent over the same period of time.”

America’s Economy: Amazing Growth

Just last month 224,000 new jobs were created in America; that figure is more than twice than was needed to maintain workforce progression.  Growth of GDP per person has increased by 1.5 percent per year and over the last decade has increased by a 3.3 percent average annually.

At the end of this month it will have been 121 months that the US economy has been in a state of consecutive growth.  According to the National Bureau of Economic Research (NBER), this is the longest stretch of time since 1854 that the economy has encountered such growth.

Given that the US economy is responsible for 25 percent of global output, if it keeps growing like this, it could be “time to rewrite the rules for how all rich economies behave.”  America is certainly not an island (economically) so if the countries it trades with encounter a recession it will impact the US as well.