Recent U.S. Census numbers on the well-being of Americans tell us we’re making good economic progress.
Here are some top line numbers:
- We have more workers. There were 2.3 million more workers in 2018 than 2017.
- They’re getting paid more. Earnings increased by 3.4% from 2017 to 2018.
- Poverty declined by 0.5 percentage points to 11.8%. 1.4 million fewer people were in poverty.
This is good news on two levels.
Workers are earning more to support their families.
For businesses struggling to find workers, more of them in the labor force is welcome. Of course we’re still in a situation where there are more jobs than people available, so workforce issues remain a big deal.
The lesson is clear: Good policy produces good results.
Economic growth driven by tax reform and the Trump administration’s efforts to reduce regulatory burdens are having a positive effect.
It’s a welcome change to the sluggish economic growth in the years following the Great Recession.
Given this, we should heed the warning U.S. Chamber CEO Tom Donohue delivered late last month.
“Amid all the talk of a possible recession, it’s important for everyone to remember this: Economic expansions do not die of natural causes,” Donohue writes. “They often die because of missteps and policy mistakes. And the biggest mistake our leaders could make right now — putting our economy at greater risk of a downturn — is to stoke further uncertainty.”
The trade conflict with China is one issue that is top of mind – the U.S. and China delaying some additional tariffs and coming back to the bargaining table is welcome news – but there’s also Brexit, Iran, and North Korea that can shake business confidence.
We’re starting to see signs of policy uncertainty having an effect. Manufacturers are getting antsy about the economy as U.S. Chamber Senior Economist Brian Higginbotham explains:
The slowdown in business confidence is apparent in the latest survey from the Institute of Supply Management. The organization’s manufacturing index dropped to its lowest reading since January 2016 and ended a 35-month expansion period in which the index averaged over 56.5, well above 50, which is the threshold for expansion in the sector. The index dropped below 50 (49.1), which indicates that manufacturing contracted in August.
Reducing policy uncertainty would boost confidence and rejuvenate investment spending. “At this moment of uncertainty, it is critical that our leaders take decisive steps to bolster the economy and avoid actions that could turn talk of recession into reality,” Donahue writes.
Those steps should include Congress approving the U.S.-Mexico-Canada Agreement (USMCA) this fall and passing an infrastructure package that will support a growing economy.
If we want to continue sustained, broad-based growth our leaders need to come together and advance policies that reduce uncertainty.
That way this historic economic expansion continues improving Americans’ lives.
