US Economy in 2018

For the average person, the US Economy performed better in 2018 than it has in any year in the last 10.  Overall, the economy grew over 3%, something that Obama era economists said was impossible.

According to the Labor Department, seasonally adjusted job growth was 312,000 in December.  We have more people employed in the USA currently than ever before.  Unemployment rates hit record lows for both blacks and Hispanics in 2018.  Last, hourly earnings rose 3.2% in 2018, their biggest gain in the economic expansion that started way back during the Obama era.

I credit a lot of this to changes in the macro business environment.  The Trump Administration is net cutting regulations.  There are no huge new regulations on business that are being planned.  Under the Obama Administration, they whacked business with new regulations at every opportunity plus kept planning more business beat downs at every turn.  The changes in business taxation made the USA competitive internationally  Previously, US business taxes were among the highest in the developed world.

Anyone can pick and choose whichever factors to account for the growth in the economy – but the fact that the growth in GNP, employment, and wages are real is reality.

The reason I give a lot of credit to business taxation and less regulation is those two factors also occurred during the Reagan administration.  There was another big bump in the economy during the Clinton Administration, but I attribute a lot of that to increases in business productivity coming from integration of information technology into the supply chain.  If you read business history, it takes 30+ years for new technology (here much cheaper computing power and communication advances via cell phones and the internet) to be integrated into the economy.  We saw similar time lags for other major advances – steam power integration and integration of electrical generation and transmission.

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