As part of my evolving effort to do more to encourage others to base votes for elected officials on hard numbers and quantitative evidence rather than subjective and possibly biased perceptions and intuitions (not to mention fake-news), I’m collecting various economic data to help readers gauge the potential impact of the Trump administration on the overall health and well-being of the U.S. economy.
Now, I’m neither a political scientist nor an economist. So, this is as much an effort to better educate myself, as a concerned and curious citizen, as it is an effort to better educate others.
The charts below depict up-to-date information on a number of important issues, including unemployment, labor force participation, job creation, inflation, and income inequality. Of course, it’s impossible to provide an entirely complete picture of something as large and complex as the U.S. economy in just a few charts. So, it’s best to look at the information below as merely a rough snapshot of the current state of the economy and jobs market. That said, I’ve attempted to put things in context by providing economic and jobs data stretching back to at least the year 2000.
The data related to employment, job creation, and inflation (i.e., Charts 1-5) come from the U.S. Bureau of Labor Statistics, whereas the data related to income inequality (i.e., Chart 6) come from the U.S. Census Bureau.
As a reminder, you can also visit my “Trump Tracker” if you’re interested in keeping tabs on various non-economic metrics related to the 45th President of the United States – from favorability ratings and job approval numbers to media-sponsored fact-checks and recent tweets from the President himself.
A Snapshot of the Current State of the Economy
The Employment Situation for December is scheduled to be released on Friday, January 5, 2018 at 8:30 a.m. (EDT). The Consumer Price Index for December is scheduled to be released on Friday, January 12, 2018, at 8:30 a.m. (EDT).
1. Unemployment Rate – The number of unemployed people as a percentage of the entire labor force. People are considered unemployed if they do not have a job, have actively looked for work in the last four weeks, and are currently available for work.
2. Labor Force Participation Rate – The number of people in the labor force as a percentage of the civilian noninstitutional population 16 years old and over (i.e., those who are not inmates of institutions – such as penal, mental facilities, or homes for the aged – and who are not on active duty in the Armed Forces). In other words, it is the percentage of the population that is either working or actively seeking work.
3. Employment/Population Ratio – The percentage of the civilian noninstitutional population, between the ages of 25-54, who are employed. In other words, it is the percentage of the population that is of prime working age and currently employed. Compared to the Unemployment Rate and the Labor Force Participation Rate, this is arguably a more useful measure of the overall health of the job market because it excludes members of the population who have opted out of the labor force for non-economic reasons, such as college students and those who are retired.
4. Number of New Jobs Created per Month – Monthly change in the total number of nonfarm employees, in thousands, seasonally adjusted.
5. Consumer Price Index (CPI) – Frequently thought of as a sort of “cost of living index,” the consumer price index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services – things such as gasoline, food, clothing, automobiles, and prescription drugs and medical supplies. It is one of the most frequently used measures of inflation (i.e., the process of continuously rising prices or equivalently, of a continuously falling value of money ), as experienced by consumers. The 12 Month CPI rate is expected to be 2% or less. As explained here, if this index exceeds 2%, borrowing rates may be raised to help fight off inflation.
6. Income Inequality – Income inequality refers to the degree to which income (i.e., money earned through wages, salaries, interest, stock dividends, etc.) is unevenly distributed throughout the population. It is, quite simply put, the gap between the rich and everyone else. The chart below shows growth in real family income between 1947 and 2015 (after adjusting for inflation) for each quintile (fifth) of the U.S. population, as well as for the top 5% of earners. Income is expressed as a percentage of income levels from 1973 because it was around this time that income stopped growing at roughly an equivalent rate for all groups. Since the early 1970’s, disparities have widened, with income growing much more rapidly for those at the top of the economic ladder than for those down lower on the economic ladder. In 2015, for instance, income for the top 5% was, on average, 167.07% of what it was back in 1973. Meanwhile, income for the bottom 20% of the population has remained virtually unchanged since 1973, having increasing only by about 4.5%.
For more information about income inequality and the sources of data economists use to track it, check out this guide from the Center on Budget and Policy Priorities.
Have recommendations on other economic metrics to include here? Feel free to leave a comment below.
Brian Kurilla is a psychological scientist with a Ph.D. in cognitive psychology. You can follow Brian on Twitter @briankurilla