As part of my year-end economic review, I am going to look at the statistics for the average American. The statistics used come from the Bureau of Labor Statistics, the Federal Reserve and the US Bankruptcy Court. As with all statistics, please remember these are national averages: results may vary from region to region.
The job scene: On average, the US created 185,000 jobs/month last year. Most economists feel the economy must create 150/000month to keep up with job loses, new workers entering the workforce etc... So, we could do allot better in this area. However, unemployment dropped from 5.6% this year to 5.4%. Economists consider 5% full-employment. 5% takes into account people changing jobs, just laid-off etc... Therefore, the unemployment number indicates there may not be a great deal of room for improvement in the jobs area.
Anecdotally, the US textile industry is about to compete directly with Chinese imports on January 1 when import tariffs are lifted. Currently, the Chinese have about 18% of the US market. Some economists think this figure could move to 50% with the removal of these tariffs. In short, this fact alone will flood the market with new workers looking for jobs.
In addition, as I noted in a previous diary (shameless plus), most of the top-performing industries in the market this year are manufacturing and raw materials firms. These companies benefitted from the increase in producticity for the first three quarters, meaning they do not have to increase their hiring.
Wages: The average wage for the US worker increased 2.19% this year, increasing from $15.49 to $15.83. This figure should be analyzed with annual inflation data to determine if the increase in wages is meaningful. If wages are rising faster than inflation, workers can increase their standard of living because their compensation is rising faster than prices. Inflation rose .2% last month, making the annual inflation number 2.4%. Therefore, wages are rising slower than inflation. As a result, the standard of living is decreasing for the average American worker. I should also note that .2% is a very low level of inflation. This number has been as high as .6%/month this year, further deteriorating the US standard of living.
Consumer Debt is incredibly high. Revolving credit increased 5.4% in the 1st quarter and -.7% in the second quarter. While the complete figures for the 3rd quarter are not out, September saw and increase of 17.1%, indicating the 3rd quarter number will probably show another increase. Non-revolving credit increased 6.9% in the first quarter and 4.2% in the second quarter. These figures are more reasonable, but must be considered in light of the revolving debt increases. In short, the US continues to buy on credit at an alarming rate.
In summation, things could be a whole lot better.