The surprising 1st quarter’s robust growth of 3.2% for the U.S economy may prove short lived. Overall growth will slow toward year-end. US economic challenges, especially in the US created tariff war with China and in weakening growth in Europe, where the real problem of slowing, is. But, the decade-long expansion in not in danger, yet.
Disposable personal income increased by 3%, prices increased by 1.3%, excluding food and energy. Overall prices climbed by 0.8% in the first quarter. Personal spending though, the biggest component was up just 1.2%, two tenths more than expected as an increase in spending on services and nondurable goods offset a decline in spending on durable goods.
Investors were closely watching out for the report as they looked for more confirmation that a recession may not be in the cards over the short term. The S&P 500 is up 16.7% this year after the Federal Reserve reversed course in its path to tighter monetary policy, easing fears that a recession may be imminent.
The mantra that we’ve lost good-paying jobs to China is exactly wrong. We have lost the bad-paying jobs to China and gained good-paying jobs. The U.S. has lost 5 million manufacturing jobs since 2000, and those losses have reverberated across the country. The scale of those losses has overshadowed areas of growth—but there has been growth. For example, the number of workers employed manufacturing medical equipment and supplies has grown eight percent over the last two decades, even as overall the U.S. job market has been robust for much of 2016. Employers have added more than 2.2 million jobs over the past 12 months — a sign of economic health that predates Trump’s presidential victory. Manufacturing employment has fallen 28 percent over that same time period.
Finally, though immigrants make up about 13 percent of the U.S. population, they contribute nearly 15 percent of the country’s economic output. They have an outsized role in U.S. economic output because they are disproportionately likely to be working and are concentrated among prime working ages. Moreover, many immigrants are business owners. In fact, the share of immigrant workers who own small businesses is slightly higher than the comparable share among U.S.-born workers. We should not be fearful that immigrants are stealing jobs from “everyday Americans.” Study after study has shown that immigration actually improves wages to U.S.-born workers and provides more job opportunities for U.S.-born workers. ABC News, reported that “The fact is immigrants often push U.S.-born workers up in the labor market rather than out of it.”