Spending by foreign visitors in the United States, including fares on U.S. airlines, is considered an export for purposes of U.S. gross domestic product, while spending by U.S. citizens in foreign countries and on foreign airlines is considered an import. Both types of travel spending were hit hard by the pandemic but surpassed pre-pandemic levels in 2024. However, prior to the pandemic, spending by foreign visitors was generally higher than U.S. citizens' spending in foreign countries — … [Read more...]
Prime Workforce Stays Strong
The labor force participation rate — the percentage of Americans age 16 and older who are working or actively looking for work — peaked in early 2000, when it began to drop due to an aging population and more young people in college. Participation was rising before the pandemic but has only partially recovered, due in large part to accelerated retirement among older workers. The rate for the prime working ages of 25 to 54 surpassed the pre-pandemic level in 2023 and was still above it as of … [Read more...]
Breaking Down the Numbers: The Soaring U.S. National Debt
The U.S. national debt is the total amount of money owed by the federal government. As of January 2025, it stands at $36.16 trillion.1 The difference between deficit and debt When the federal government spends more money than it collects in taxes in any given fiscal year (the government's fiscal year runs from October 1 to September 30), there is a deficit. The opposite of a deficit is a surplus. To fund its operations when there is a deficit, the government borrows money by selling … [Read more...]
Tariffs: How They Work and Potential Economic Effects
On February 1, 2025, President Trump authorized an additional 25% tariff on all goods entering the United States from Canada and Mexico (except for a lower 10% tariff on energy resources from Canada) and an additional 10% tariff on all goods from China. Nine days later, Trump authorized a 25% tariff on steel and aluminum, effective March 12, which strengthened and elevated tariffs levied by the first Trump administration in 2018.1 These were the opening salvos in what promises to be a period of … [Read more...]
Three Market-Moving Economic Indicators to Watch
Among all of the economic indicators released each month, three reports in particular can move the market: the Employment Situation, gross domestic product, and Personal Income and Outlays. The Employment Situation Each month, the Bureau of Labor Statistics (BLS) publishes the Employment Situation Summary report based on information from the prior month. The data for the report is derived primarily from two sources: (1) a survey of approximately 60,000 households, or about 110,000 … [Read more...]
Quick Recovery for Unemployment Rate
The U.S. unemployment rate skyrocketed to 14.7% in April 2020 when the economy shut down in response to the pandemic. This was by far the highest rate since the current tracking system began in 1948. Fortunately, employment has recovered at a record pace — the unemployment rate was just 3.6% in March, April, and May 2022, nearly the same as before the pandemic. The official unemployment rate only reflects unemployed workers who are actively looking for a job. A broader measure that captures … [Read more...]
GDP Growth Highest in 37 Years
In 2021, U.S. real gross domestic product (GDP) — the value of goods and services produced in the United States — grew by 5.7%, the highest annual rate since 1984. This marked a strong recovery from 2020, when GDP dropped by 3.4%. Real GDP is adjusted for inflation to more accurately compare economic output at different periods. Current-dollar GDP, typically used to measure the overall size of the economy, increased by an even more impressive 10.1%. Source: U.S. Bureau of Economic … [Read more...]
Food Inflation: What’s Behind It and How to Cope
As measured by the Consumer Price Index for food at home, grocery prices increased 3.4% in 2020, a faster rate than the 20-year historical average of 2.4%.1 More recently, food inflation accelerated by 6.5% during the 12 months ending in December 2021, while prices for the category that includes meat, poultry, fish, and eggs spiked 12.5%.2 Food prices have long been prone to volatility, in part because the crops grown to feed people and livestock are vulnerable to pests and … [Read more...]
Inflation Cuts into Wage Gains
Driven by labor shortages, median hourly wages increased at an annual rate of 5.2% in December 2021, the highest level since June 2001. However, inflation cuts into buying power, and real wages — adjusted for inflation — actually dropped as inflation spiked in 2021. By contrast, negative inflation (deflation) during the Great Recession sent real wages skyrocketing temporarily even as non-adjusted wage growth declined. Sources: Federal Reserve Bank of Atlanta, 2022, and U.S. Bureau of … [Read more...]
New Businesses May Be Good News for the Economy
After taking a nosedive at the start of the pandemic recession (gold shaded area), business applications rose sharply, peaking in July 2020. Applications have fallen somewhat since then but are still up approximately 84% from their April 2020 low. Businesses that are likely to hire employees — called high-propensity businesses — make up approximately one-third of total applications. Businesses with payroll are considered more likely to power job growth and economic recovery. Source: U.S. … [Read more...]
