Paul Solman:
The biggest problem has been inflation, of course, but Wolfers is borne out by prices in sectors we have been showing you, inflation, the souffle-like rise in egg prices, now dropping, lumber up fourfold during COVID, back down near its level before the pandemic, containers shipping up five times just two years ago, with prices back down to where they were in 2019.
"The Economist" magazine had the most positive take of oil in a recent cover story, pointing out that America's GDP represents about 25 percent of the world total, almost the same share as it had in 1990, and that $100 invested in the S&P 500, a stock index of America's biggest companies, in 1990 would have grown to about $2,300 today, invested in an index of the biggest rich world stocks, which excluded American equities, about $500.
But if the economy is so good, how come so many Americans don't believe it or feel it?
As an expert in economics and financial analysis, my deep understanding of the subject allows me to provide a comprehensive analysis of the concepts mentioned in the provided text. The evidence presented in the article touches upon various economic indicators, including inflation, commodity prices, GDP, and stock market performance. Let's break down the key concepts discussed:
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Inflation:
The article highlights inflation as a significant concern. It refers to the souffle-like rise in egg prices, which has since dropped, and the fluctuation in lumber prices, which surged fourfold during the COVID-19 pandemic but has now returned to pre-pandemic levels. Additionally, container shipping prices, which saw a fivefold increase two years ago, have now returned to 2019 levels.
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Commodity Prices:
Lumber prices are specifically mentioned, indicating a fourfold increase during the pandemic and a subsequent return to pre-pandemic levels. This demonstrates the impact of external factors, such as global events, on commodity prices.
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GDP (Gross Domestic Product):
The article references America's GDP, stating that it represents about 25 percent of the world total, a figure consistent with its share in 1990. This suggests a stable position in the global economy over the years.
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Stock Market Performance:
The performance of the S&P 500, a stock index of America's largest companies, is discussed. The article notes that $100 invested in the S&P 500 in 1990 would have grown to about $2,300 today. It also compares this growth to an index of the biggest rich world stocks, excluding American equities, which would have grown to about $500. This information highlights the significant returns generated by American equities compared to other global stocks.
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Public Perception of the Economy:
The article raises the paradox of a seemingly robust economy coexisting with a widespread belief among Americans that the economy is not performing well. It poses the question of why many Americans don't feel the economic prosperity reflected in the mentioned indicators.
By integrating these concepts, the article provides a nuanced view of the economy, incorporating both positive indicators and the challenge of perception among the general population. My expertise allows me to delve into the intricate connections between these economic factors and their implications for individuals' perceptions of the overall economic health.
FAQs
National Economic Accounts
What is the current strength of the US economy? ›
Economy of the United States
| Statistics |
|---|
| GDP | $28.78 trillion (nominal; 2024 est.) $28.78 trillion (PPP; 2024 est.) |
| GDP rank | 1st (nominal; 2023) 2nd (PPP; 2023) |
| GDP growth | 2.1% (2022) 2.5% (2023) 2.7% (2024f) |
| GDP per capita | $85,370 (nominal; 2024) $85,370 (PPP; 2024) |
38 more rowsGDP is important because it gives information about the size of the economy and how an economy is performing. The growth rate of real GDP is often used as an indicator of the general health of the economy.
How is the US economy doing right now? ›
The state of the U.S. economy is strong despite inflation remaining elevated. The economy is expanding at a crisp pace, unemployment is low, inflation is slowing from its peak.
How strong is the US economy today 2024? ›
From 2024 through 2028, GDP will increase at an average annual rate of 2.4% per year, 0.6 percentage points higher than the baseline forecast. This scenario also results in higher long-term potential for the economy at 2.3%, compared to 1.5% in the baseline.
Is the US experiencing a strong economy right now? ›
The United States has seen a particularly strong GDP recovery and is on track this year to reach the level that would have been predicted by the pre-pandemic trend.
Is the US economy healthy right now? ›
Adding to the good news of low unemployment and slowing inflation, real wages are rising for most workers, and low-wage workers have seen the biggest gains. The lowest 10th percentile of earners experienced 9% real wage growth between 2019 and 2022, their largest three-year increase in 40 years.
Will China overtake the US economy? ›
However, even in the best-case scenario, China's ascent to surpass the United States as the world's largest economy will take longer than previously anticipated. Assuming a 5 percent annual growth rate, China might not overtake the United States until 2035.
What country has the best economy? ›
The United States is the undisputed heavyweight when it comes to the economies of the world. America's gross domestic product in 2022 was more than 40% greater than that of China, the world No. 2. Even more striking, U.S. GDP was over five times that of the next two largest economies, Japan and Germany.
What is the richest country in the world? ›
Using the first metric, Switzerland is the richest country in the world at an average per-capita wealth of around $685,000, followed by Luxembourg and the United States.
The US economy is showing “remarkable strength” compared with Europe, where countries are struggling more with tighter monetary policy and the shocks of the energy price surge in recent years, OECD Chief Economist Clare Lombardelli said.
Is the US economy declining? ›
Growth was stronger than expected a year ago.
Defying pessimistic forecasts, US economic growth has progressed at a significant pace over the course of 2023. Last December, the private consensus for real economic growth as measured by the Blue Chip Economic Forecast was negative 0.1% for the year.
Is the US economy fragile right now? ›
No, it's actually booming again. Inflation is plummeting. No, it has started rising again. If you find the cacophony of economic indicators to be confusing, don't feel bad.
Is the US economy doing well in 2024? ›
The United States is expected to keep churning out growth in 2024. The International Monetary Fund expects the American economy to expand 2.1% this year — more than twice its forecasts for growth in the major advanced economies Japan, Germany, the United Kingdom, France and Italy.
Are we in a recession 2024? ›
The New York Stock exchange (NYSE) at Wall Street, Jan. 31, 2024, in New York. A forward-looking measure of the U.S. economy continued to decline in January but importantly it is no longer signaling a recession in 2024, reflecting an economy outperforming expectations.
Will the US economy get better in 2024? ›
Economic Growth
In calendar year 2023, the U.S. economy grew faster than it did in 2022, even as inflation slowed. Economic growth is projected to slow in 2024 amid increased unemployment and lower inflation. CBO expects the Federal Reserve to respond by reducing interest rates, starting in the middle of the year.
What is the greatest strength of the US economy? ›
Strengths
- Flexible labour market.
- Full employment is one of the Federal Reserve's objectives.
- The dollar's predominant role in the global economy.
- 70% of public debt held by residents.
- Strong attractiveness: leader in research and innovation, a huge market, two ocean fronts and a privileged tourist destination.
Though the economy occasionally sputtered in 2022, it has certainly been resilient — and now, in the first quarter of 2024, the U.S. is still not currently in a recession, according to a traditional definition.
Is the US economy in recession? ›
The US economy is nowhere near a recession, Goldman Sachs' top economist says. The soft landing that once looked nearly impossible for the Federal Reserve to pull off is still on track.
