The State of the US Economy
How Are Americans Really Doing?
The state of the US economy has become somewhat of a polarizing topic. The viewpoint tends to change depending on the source. The government might say we’re doing fine, but that may not reflect the overall attitude of the average citizen. The answer has also become more political. Sources will often frame their outlook based on political biases rather than facts.
With so many different angles on the US economy, it’s difficult to get an accurate unbiased outlook.
In this article we’ll outline all of factors affecting the economy to give the most factual conclusion.
First let’s identify the six major variables that affect the economy:
Unemployment Rate: The unemployment rate is calculated by the number of unemployed people divided by the total workforce. The rate of unemployment is currently 4.2% in America. While the number is relatively low compared to higher levels, it still doesn’t consider the number of citizens who’ve stopped searching for full-time employment. Many Americans have settled for gig work and part-time jobs instead of traditional 9-5 employment. The unemployment is still stable enough to not be considered a recession.
Inflation: Inflation measures the rate of price increases on an annual basis. The Federal Reserve is currently targeting a 2% inflation rate. The US inflation rate peaked in 2021, but has steadily decreased since that time. The current inflation rate of 2.7 indicates that the costs of goods has been increasing for Americans—despite at a lower rate. Citizens have had to manage the increased cost of living with wage growth not keeping up.
Rent Prices: Rising rent costs are related to the nation’s inflation. The increased cost of rent has had the highest effect on everyday Americans. High prices reduce living options for individuals searching for places to live. Increased rent prices have been one the most negative effects of rising inflation for everyday Americans.
Mortgage Prices: The mortgage rate is the percentage lenders charge home buyers to purchase a home. Like rent prices, mortgage rates are a good indicator of how the economy is affecting the average citizen. The current mortgage rate is 6.570%. The rate has been relatively steady, hovering around 7% for the past 30 years. This has been an obstacle for homeowners looking to sell at a lower interest rate. There is, however, nothing from the mortgage rate to indicate a staggering economy.
Stock Market: The stock market is where investors connect to exchange shares in different companies. The reason this is important is because the stock market shows the investor confidence in the economy. A dip in the stock market indicates less confidence in the overall economy, often having real world consequences. The stock market experienced a major decline during the pandemic but has bounced back and remained steady since then. Investors seemed to have regained confidence in the overall market.
Consumer Confidence: Consumer confidence is the overall attitude the public has towards the state of the economy. What’s tricky about consumer confidence is that while it may not reflect actual data, its effect on the economy is significant. Consumer sentiment determines whether people feel comfortable participating in the market. For instance, when people are worried about the state of the economy, they tend to spend less money. This decrease in spending can in turn slow economic growth. The consumer confidence is indicated to be 97.4%. This is a decrease from the month prior.
Based on all factors affecting the US economy, it’s safe to say that while there’s nothing to indicate a recession, the economy is beginning to show signs of strain. Rising inflation and lack of consumer confidence continue to be an issue. These factors may lead to long-term downturns in the economy should nothing change.
Will AI Be the Death of Manual Labor
A Look at the Emergence of AI in the Workforce and How it Affects Jobs
The emergence of AI within the last decade has changed the world. Not only has it influenced how people interact with technology, but it’s also affecting how work is performed. The U.S. economy is expected to add over 5 million jobs by 2034. Within that growth, AI is projected to influence computer and mathematical occupations. Jobs related to data analysis and information technology will particularly see more progress. There is, however, some anxiety within the workforce about how AI will negatively affect employment.
Fields such as accounting, administrative work, sales, etc., will see the largest negative impact. Industries like healthcare may have the opposite effect. AI has the potential to enhance the duties of healthcare professionals as it eliminates the more tedious tasks, allowing them to focus on patients.
It’s also projected that younger workers will bear the brunt of AI’s impact on employment. AI will most likely replace entry level jobs. What gives older workers an advantage is their knowledge of soft skills which comes from work experience. Younger employees are encouraged to be mindful of these factors when determining the types of careers they wish to pursue.
It's not just entry-level employees that may be impacted by artificial intelligence. Workers of all fields are advised to build their skills in terms of adaptability and problem solving. AI doesn’t necessarily have to be in contrast with human capital. Stanford economist states, “Workers who can learn to use AI to help them do their jobs better will be best positioned for success in today’s labor market.”
The best way to view the new emergence of AI in the workplace is as an enhancement rather than a replacement. While the new technology may restructure the workplace in new ways, that doesn’t mean it’s a bleak outlook for all employees. The workers who increase their skills in alignment with this new technology will do well in the future.
USA EVs VS Chinese EVs
Can the US Compete with China’s New Dominance?
When it comes to the world of electric vehicles, there are two main countries that seem to have a corner in the market: USA and China. Both have made massive advancements in the field, but China seems to have taken the lead in terms of expansion.
China offers nearly 200 brands offering electric vehicles. The country’s domestic market has grown at a significant pace. That’s not to say that American car brands haven’t made strides as well. Companies like Tesla and Rivian have had increased popularity within the past few years as well. Tesla is currently expanding into Asian markets. What makes the EV market in China unique, however, is the involvement of the Chinese government. Chinese government subsidizes its EV industry to give it a global advantage. US companies, on the other hand, must struggle with higher labor costs and limited government support. In total, China has dished out $231 billion in subsidies from 2009 to 2023.
Another variable working in China’s favor is the stronghold they have in the components within EVs. They produce nearly all of the world’s Lithium Iron Phosphate electrical vehicle batteries. Tesla, Ford and Toyota have all gotten their EV batteries from Chinese companies such as CATL and BYD.
The market for EVs is continuing to grow and become more competitive. They are cheaper to drive compared to gasoline cars. As a result, both domestic and international companies have been expanding their models—with China leading the pack. Both the boost from government subsidies and battery market have given China the edge in the EV market. But the US is not out the race just yet. Brands such as Tesla and BYD are continuing to innovate and expand into new markets. The race towards EV dominance should be exciting for consumers and it looks like it’s just getting started.