IN the last two years, the US economy saw its fastest decline in unemployment since the 1980s and concluded its best years of job growth since the 1990s, according to the 70th annual Economic Report of the President.
The most recent version of the report, released Monday, Feb. 22, by the Council of Economic Advisers, also noted the nation’s economy also extended the longest streak of job growth on record, and that wage growth in the last 12 months was the strongest it has been since the Great Recession.
The combination of increased jobs and wages helped boost consumer confidence about the economy to its highest level since 2004, according to the report.
“In 2015, we continued to take steps forward, with strong job growth and wages rising at their fastest rate in the recovery,” President Barack Obama said in the opening message of the 430-page report. “So claims that America’s economy is in decline or that we haven’t made progress are simply not true.”
This year, the economy is expected to grow to 2.7 percent, while the jobless rate has dropped more quickly than many analysts predicted. In January, the rate fell to 4.9 percent, and it is expected to fall to approximately 4.5 percent by the end of 2016. This figure would be near the rate of full employment, according to the report.
But although there were many indicators of domestic resilience, the report also touched on both challenges at home and abroad.
Slow growth in other nations – including Brazil, Canada India, the European Union and China, for instance – has resulted in limited demand for US exports.
Domestically, cheaper gas prices had a smaller impact on gross domestic product at just 0.2 percent. Although paying less at the pump left consumers with more to spend, it was largely offset by the decline in drilling activity.
Crumbling roads and other similar infrastructure also slowed down US growth.
Furthermore, economic growth is expected to slow down slightly to 2.5 percent in 2017 and 2.4 percent in 2018.
“It is critical to strengthen domestic growth by boosting our economy’s productivity and dynamism, to work with partners around the world to improve global growth, and to take steps to help ensure that the benefits of growth are shared – including by addressing the long-standing challenge of inequality,” the White House said.
The report also acknowledged that technological developments are affecting American workers by deepening income gaps and contributing to disaffection.
Obama has attempted to address this with the Affordable Care Act and through tax cuts for the middle class, his advisers said. However, Congress has balked at other measures, such as a minimum wage increase and a new infrastructure plan, The New York Times reported.
“We would have liked to have passed even more support for jobs than we did,” said Jason Furman, chairman of the economic council, according to the Times. “We’re still not all the way there. We, in particular, would like to see stronger wage growth.”
Although the report indicated improvement in America’s economy, authors of the document wrote that inequality remains among the most important challenges facing the country. They further noted that it is more pronounced in the US compared to other advanced economies and that it has sharpened more quickly in recent decades.
