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2014, the American economy is finally revitalized from the recession that began in 2008. The unemployment rate is now down to 5.9%, a 6 year low. Also, the Labor Force Participation Rate is down to 62.7% a low not seen in 36 years! Compared to 2007 there are 6.9 million fewer Americans looking for work; in fact 92.6 Million Americans apparently don’t need jobs so they aren’t counted in the unemployment numbers.
Some are just Baby Boomers retiring. Some are new college attendees that will surely have a bright future from choosing to get a higher education. We can safely assume the rest that have stopped looking for work must no longer need a job since America is thriving and returning to prosperity! Increasing property values and an increased stock bubble- I mean rally, are clear signs of the recovery and a better standard of living for the average American.
In September there were 248,000 new jobs added to the American economy: Plenty of decent jobs in retail and the service industry shows the strength in our robust consumer economy. Many are also part time which is good; this allows employees flexibility, free time and social lives. This amount of jobs beat the 215,000 prediction of economists! What’s even better is the fact that 93% of these jobs were in the 55-69 age bracket. We’re finally getting our seniors back to work!
Recent increases in immigration should also show our strengthening economy.
Why would people want to come here if we weren’t prosperous?
Worker pay is up an incredible 7.1% since 1978, not adjusted for inflation. CEO pay is also up by 937% in the same time…adjusted for inflation. Income mobility is so good that after five years of reaching a six-figure income, half remain there. After 10 years, an amazing 33% of people still make a six-figure income and don’t fall back down to a lower rung of the economic ladder.
Top job growth sectors include personal care, nurses, retail and food preparation. Also secretaries, customer service reps and don’t forget janitors! The healthcare industry expects major growth in the next 10 years.
When looking at the stock market we are seeing a fantastic 10-year high with stocks valued 53% higher than their 10-year average. Some are saying we’re potentially in a bubble, but the S&P 500 is still lower than 2001’s all-time high when we adjust for inflation! This high would be 2,120 on January 14, 1999.
We’re Now Barely at 2,000, so Stop Worrying!
After the 2008 crash our financial regulators made some smart moves to get us back on track. Federal Reserve chairman Ben Bernanke kept interest rates low to encourage higher employment. He also mandated a 2% inflation rate that helped us avoid a 2nd great depression. In 2014 Janet Yellen replaced Mr. Bernanke and continued the same policies of “accommodation.”
The Federal Reserve has the dual mandate of promoting maximum employment and maintaining inflation. They are keeping interest rates at zero for a “considerable time” to achieve these goals. The fed will most likely start raising rates around mid-2015 or so. Original plans to raise interest rates have been delayed since 2011, but this time it will happen for sure!
Retail sales for August 2014 are up 5% year over year, the highest in 13 whole months! New car sales are also up in the same amount of time; Americans are spending more! Fun fact, a lot of the spending is in auto loans which there’s currently $924 Billion of; the highest debt, excuse me, spending in automobiles there’s ever been. It’s good to know that only a third of these are from sub-prime borrowers.
To top off all this prosperity is crude oil hitting a 2-year low around $90 per barrel. Natural gas is also near a year low. The U.S. Dollar Index is at a 4 year high. The Dow Jones is near a nominal all time high over 17,000.
America is Back! Prosperity is here…What could go wrong?!
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If you believe the American Economy is on the short road to recovery, have a fantastic life.
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