As the US takes a break Thursday to celebrate Independence Day, here is some fodder for Americans in search of reasons to be patriotic: a few charts showing how remarkably resilient the US has been lately.
It’s worth noting that the US economy isn’t all gumballs and puppy dogs. Unemployment remains high, and in recent decades it’s gotten harder to find a job to support a middle class lifestyle. Student debts are staggering. And while deficits are shrinking, the national debt remains unwieldy. Oh, and wealth is increasingly concentrated in the hands of the few.
Nevertheless, a strong economic recovery is in the works, which, in the very least, makes those formidable economic challenges easier to tackle.
But job growth has been solid. Since the end of 2011, the US has averaged about 185,000 new jobs a month.
And on the whole, inflation-adjusted private wages are growing. (That’s even after wage increases spiked at the end of last year, thanks to one-off bonus payments designed to avoid tax increases.)
What’s driving wage increases has less to do with surging pay and more to do with decreasing inflation (the chart above is inflation-adjusted). That decline in inflation is partly thanks to dropping gas prices.
Due to a combination of foreclosures, refinancing and paybacks, the debt burden on US households looks much more manageable.
Meanwhile, the housing market is healing. Home sales are picking up, even though they’re far from pre-crisis peaks.
Despite its recent slip, the stock market has clawed back to pre-crisis levels. Stocks are up roughly 140% since their low in early March 2009.
Rebounding housing and stock values have boosted US household net worth to record heights. (Though there are some serious caveats.)
And when US consumers feel better, they buy stuff. Car sales, for instance, reached a post-crisis high last month.
There are signs that the cycle is becoming self-reinforcing. With consumers buying more, more retailers are hiring.
Likewise, bankers are seeing more demand from borrowers. Check out the Federal Reserve’s Senior Loan Officer’s survey.
As a result, the financial sector is staffing up to issue more mortgage loans. Check out the Bureau of Labor Statistics’ tally of jobs in “mortgage and nonmortgage credit.”