Source: Congressional Budget Office, pub. no. 54918, January 2019
From the summary:
In CBO’s projections, the federal budget deficit is about $900 billion in 2019 and exceeds $1 trillion each year beginning in 2022. Because of persistently large deficits, federal debt held by the public is projected to grow steadily, reaching 93 percent of GDP in 2029.
Real GDP is projected to grow by 2.3 percent in 2019—down from 3.1 percent in 2018—as the effects of the 2017 tax act on the growth of business investment wane and federal purchases decline sharply in the fourth quarter of 2019. Economic growth is projected to slow to an average of 1.7 percent through 2023 and to average 1.8 percent from 2024 to 2029.
Source: Nicholas Samuels,Timothy Blake, Matthew Butler, Pisei Chea, Marcia Van Wagner, Maria Matesanz, Moody’s, Sector Comment, January 24, 2019
The federal government usually benefits the national capital region’s economy, driving high education and wealth levels, knowledge-based employment and providing a buffer during an economic downturn. But the partial federal shutdown, already the longest ever at five weeks, illustrates the drawbacks of the concentrated federal presence in the District of Columbia (DC) metro area, a significant contributor to the larger US economy. The DC area is absorbing the worst of the federal shutdown with missed pay for employees and private sector contractors reducing personal spending and tempering tax revenue for area governments. Federal workers will miss another payday January 25. In addition, public transit ridership has slowed, and operations at other government enterprises are experiencing disruption
Source: Mark Muro, Robert Maxim, and Jacob Whiton, Brookings Institution, January 2019
From the summary:
At first, technologists issued dystopian alarms about the power of automation and artificial intelligence (AI) to destroy jobs. Then came a correction, with a wave of reassurances. Now, the discourse appears to be arriving at a more complicated understanding, suggesting that automation will bring neither apocalypse nor utopia, but instead both benefits and stress alike. Such is the ambiguous and sometimes disembodied nature of the “future of work” discussion.
Hence the analysis presented here. Intended to bring often-inscrutable trends down to earth, the following report develops both backward and forward-looking analyses of the impacts of automation over the years 1980 to 2016 and 2016 to 2030 to assess past and upcoming trends as they affect both people and communities in the United States.
The report focuses on areas of potential occupational change rather than net employment losses or gains. Special attention is applied to digging beneath national top-line statistics to explore industry, geographical, and demographic variations. Finally, the report concludes by suggesting a comprehensive response framework for national and state-local policymakers.
Source: Lillie Greiman, Andrew Myers, Bryce Ward, Catherine Ipsen, The Conversation, January 28, 2019
After the devastating losses of the Great Recession, the U.S. has enjoyed one of the longest expansions in its recorded history. For nearly 100 straight months, the U.S. economy has added jobs.
But not all groups have shared equally in the recovery. African-Americans and people in rural communities have been particularly slow to recover, compared to their white and urban peers.
Our team at the University of Montana’s Research and Training Center on Disability in Rural Communities published a new analysis on Jan. 10. Our research shows that people with disabilities, particularly those in rural areas, have also experienced a longer, deeper recession and a much slower recovery. ….
Source: Laura Davison, Bloomberg Businessweek, January 16, 2019
Republicans predicted a growth explosion while Democrats warned of fat-cat investors. Both sides were wrong.
On Jan. 1, 2018, the biggest, most sweeping U.S. corporate tax cut ever enacted went into effect. A year later, we’re able to see how businesses used all that extra cash.
The short answer: to buy back shares. The long answer is slightly more nuanced, but not by much.
Source: Marsha Mercer, Stateline, December 31, 2018
For decades, cities and states have tried to create jobs and boost their economies by luring out-of-state employers. Now some areas are trying to attract workers — one worker at a time.
Starting in January, programs in Vermont and Tulsa, Oklahoma, will pay people to relocate to those places if they work remotely. Other resident recruitment strategies in Florida, Kansas, Maine, Michigan, Minnesota and Vermont include weekends that tempt tourists to stay, discounted rent, student loan assistance and free land…..
Source: Robert Polner, Futurity, January 16, 2019
The current government shutdown is now the longest on record, sidelining roughly 800,000 non-essential workers in nine agencies out of about two million full-time federal employees in all (excluding postal workers and soldiers). ….
…. The shutdown’s impact extends, Light estimates, to more than 4.1 million contract workers and grantees, as well as the hundreds of thousands of other workers. Like those non-critical workers sitting at home, contract workers, who are largely in service jobs, do not expect to be paid until Congress and the president come to an agreement to resume appropriations.
When they’ll achieve a compromise is anybody’s guess. The sticking point in this shutdown is the more than $5 billion in border-wall funding that President Trump has requested.
Meantime, fallout spreads: the appropriations freeze is bringing complications for traditional government services, from public-health inspections of food and environmental hazards to security screening.
Here, Light talks about the shutdown’s broad repercussions and if he can predict a possible end date: ….
Source: Gad Levanon, Frank Steemers, The Conference Board, December 2018
From the abstract:
The threat of labor shortages is more acute in blue-collar and low-pay services occupations than in more highly educated white-collar occupations, the exact opposite of the prevailing trends in recent decades. We expect that by the end of 2019, the labor market will be historically tight. Industries that employ large shares of blue-collar workers, such as agriculture, mining, utilities, construction, manufacturing, transportation, accommodation and food services, repair, maintenance, and personal care services, are strongly affected by rising wages and shrinking supply. While the labor white-collar market is also tight, wage growth for the 40 percent of workers in management, professional, and related occupations is slow to accelerate. Sales and office workers, most of whom do not have a bachelor’s degree, are in shorter supply than management and professional workers.
Blue Collar Worker Shortage Turns U.S. Labor Market on Its Head
Source: Rich Miller, Bloomberg, December 13, 2018
Source: Federal Reserve Bank of Philadelphia, December 5, 2018
Commonly known as the Beige Book, this report is published eight times per year. Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources. The Beige Book summarizes this information by District and sector. An overall summary of the twelve district reports is prepared by a designated Federal Reserve Bank on a rotating basis.
Overall Economic Activity
Most of the twelve Federal Reserve Districts reported that their economies expanded at a modest or moderate pace from mid-October through late November, though both Dallas and Philadelphia noted slower growth compared with the prior Beige Book period. St. Louis and Kansas City noted just slight growth. On balance, consumer spending held steady – District reports on growth of nonauto retail sales appeared somewhat weaker while auto sales tended to improve, particularly for used cars. Tourism reports varied but generally kept pace with the economy. Tariffs remained a concern for manufacturers, but a majority of Districts continued to report moderate growth in the sector. All Districts reported growth in nonfinancial services – ranging from slight to strong. New home construction and existing home sales tended to decline or hold steady, while construction and leasing of nonresidential structures tended to rise or remain flat. Overall, lending volumes grew modestly, although a few Districts noted some slowing. Agricultural conditions and farm incomes were mixed; some Districts noted impacts from excessive rainfall and from tariffs, which have constrained demand. Most energy sectors saw little change or modest growth. Most Districts reported that firms remained positive; however, optimism has waned in some as contacts cited increased uncertainty from impacts of tariffs, rising interest rates, and labor market constraints…..
Source: Barb Rosewicz & Joe Fleming, Pew Charitable Trusts, November 19, 2018
The second-longest U.S. economic expansion has played out unevenly across states. Growth has been strongest in North Dakota and a group of mostly Western states and weakest in Connecticut, as measured by the rate of change in each state’s total personal income since the start of the Great Recession. In the first half of 2018, all but a couple of states shared in widespread gains.
The national recovery has been long-running, but growth in total U.S. personal income is still off its historic pace. As of the second quarter of 2018, the combined personal income of U.S. residents rose by the equivalent of 1.9 percent a year over the 10-plus years since the recession began, compared with the equivalent of 2.3 percent over the past 20 years, after accounting for inflation.
The rates represent the constant pace at which inflation-adjusted state personal income would need to grow each year to reach the most recent level and are one way of tracking a state’s economy.
After tumbling nationwide except in West Virginia during the depths of the recession, personal income totals have recovered in all states but have grown at far different rates.
Eight states’ growth since the start of recession beat the 20-year U.S. rate as of the second quarter of 2018, and nearly all were in the West. North Dakota once again led; the sum of its residents’ personal income has increased the equivalent of 3.3 percent a year. Connecticut and four other states recorded the weakest recovery, with growth rates at or below the equivalent of 1 percent a year. None of those states are in the West.
States’ Personal Income Recovers Unevenly From Recession (PDF)
49 States’ Estimated Personal Income Grew Over Past Year (PDF)
Number of States in Which Inflation-Adjusted Personal Income Fell (PDF)