What We Make
The Economy We've Made for Each Other
First, thank you
It’s been so encouraging hearing all the positive feedback you’ve given me. I am excited to be on this journey together, and you each have already shown how well you embody the “kind, and open-minded” part of how we will take care of each other here. That’s so important because the kind and open-minded parts are probably the most important for remembering to take care of each other when we disagree on conclusions.
Because we will disagree sometimes. When we disagree, my hope and prayer is our commitment to stay kind and open-minded will help us see the disagreement as an opportunity to grow and understand each other better. If we end up with the same conclusions, that’s okay; we’re not here to convince each other, though. If we can walk away from those disagreements understanding each other, that’s a huge win in my book. That’s the kind of hope I want to see planted in our hearts: understanding through kindness. 🌱
Disclaimers
I gave you my word in last week’s post I’d be opinionated, kind, and open-minded. I explained part of that is you’d know where I stand on topics. If you disagree with any of what I’m about to say, then please know I’m glad you’re here. 😊 If you do agree, I also appreciate you. 😊 No matter what, I feel its our differences in perspective that help us grow. Anyways, here we go:
I feel economies should work for everyone, especially the most vulnerable (Leviticus 23:22, Isaiah 1:17, and Psalms 82:3 all seem to suggest this)
I used to think U.S. Presidents had no affect on the economy. As I’ve dug into data going back to the fall of the Berlin Wall in 1989 and even to Ronald Reagan and before, I now feel the data supports presidents do have an impact on the economy.
Joe Biden has been a good president and America is better off than three years ago.
Again, you can feel differently about my three conclusions. If you do, I encourage you to be opinionated, kind, and open-minded when talking to me, sharing this with your friends, or in the comments (for paid subscribers). I won’t be arguing any of these in this post, I just committed to each of you I’d be transparent. This post is about the good news of where the economy is, and I feel you deserve to know where I’m coming from.
Last two notes before we get started.
If you disagree with my claims, please fact check me and let me know if I’m wrong. I’m learning, and I would like to learn together. 🙂
If you agree with my claims, please fact check me. Confirmation bias tricks our brain into overlooking errors with information we already believe.
Now let’s get to business
Both 2021 and 2022 proved strong years for starting a small business and 2023 is on track to continue that trend. In the first 6 months of 2023 almost 871,000 applications have been filed for small businesses likely to higher employees, an increase of 36 percent compared to 2019 before the pandemic. Growth in total small business applications from 2019 to 2022 is especially strong in rural communities like mine: 69.8% growth (Henry County TN), 103.3% growth (Wayne County, IL), and 121.6% growth (Ware County, GA).
Source: 2023 Business Formation Midyear | EIG
I encourage you to check out the map for yourself as it was encouraging to see so much growth shared across our nation rather than isolated. We are stronger when we grow together, so I’m glad to be able to highlight when our neighbors are doing better.
More small business means more jobs
I think the growth in small businesses makes the record high job creation and record low unemployment make even more sense. We’ve added over 13.1 million new jobs to the economy in the last two and a half years. Back in August 2022, we finished recovering the roughly 8 million jobs lost during the world health crisis. What many economists thought would take five years, we did in just over one year.
On the employment front, full employment is considered anything under 4% unemployment, and we’ve been under that mark for well over a year now. That means most of our neighbors have never known a time when unemployment was this good for this long. You’d have to go back to the 1960s, actually. And back to just after World War II to find peacetime unemployment this low for this long.
Source to dig in: Civilian unemployment rate
Source with data going back to 1948: Unemployment Rate | FRED | St. Louis Fed
Manufacturing jobs
We have also seen a drastic increase in private investment in manufacturing in the U.S. which has led to the creation of almost 800,000 new manufacturing jobs since the beginning of 2021.
These jobs pay good wages with great benefits and often do not require a college degree. The fact much of this manufacturing investment is spread across the United States to areas which have gotten left behind in the past is really encouraging to me. As I made clear at the start, I feel economies should work for everyone.
Wage growth
Even with high inflation from supply chain issues and increased corporate profits, Americans have seen inflation adjusted wage growth that is inline with growth from before the world health crisis. Not only are production/non-Supervisory workers (about 80% of workers) making more than in 2019, when adjusted for inflation it looks like we are making what we were on track to had the pandemic never happened.
And since you brought up inflation…
Inflation has come down every month for the last twelve months in a row in the U.S. The last two months have seen annualized inflation of only 1.2% and 2.4%, respectively. It isn’t guaranteed, however, my understanding is that data suggests the 3% inflation we saw in July will likely continue dropping in the coming months. This is all significantly better than the inflation data of any of our peer nations in the G7.
Again, I’m not arguing what caused inflation. If you are interested in my breaking that down in a future post, let me know and I’ll consider it (not next week though, don’t worry). Hint: the data shows it isn’t wage increases or government spending. If I do, it will likely be a paid post since it likely is less prown to sowing hope, but we’ll see.
Stocks
Here are the graphs for the DOW Jones Industrial Average, NASDAQ Composite Index, and S&P 500 Index, respectively, since the 1970s. I originally pulled graphs for the last 5 years, but I felt it was easier to see how strong our recovery has been with all the data. I would encourage you to check my source to dig into the data yourself.
Source: DJIA | Dow Jones Industrial Average Overview | MarketWatch
Source: COMP | NASDAQ Composite Index Overview | MarketWatch
Source: SPX | S&P 500 Index Overview | MarketWatch
Note: I used the advance charting to get my graphs, but it is the same data either way.
Key take aways as I look at these measures of the stock market:
Companies are doing better than in 2019 and seem to have fully recovered from the dip in 2020.
Even during the dip in 2022, all three measures were better than their best month in 2019.
Our companies have been growing fast since around 2009.
Economies are for humans, not money
I’ve covered a lot of information, and I can’t thank you enough for sticking with me this far. I wanted to end on a more human note. We are happier with our jobs than we have ever been since The Conference Board started measuring it in 1987.
Source: Job Satisfaction 2023 | The Conference Board
If you dig into the report (which I encourage you to do if you have time) you will find every area surveyed increased from satisfaction with the health plan to enjoyment of the people at work. The report also discusses what most impacts employee retention if you are interested in that. 😁
Wow…
I know, that was a lot of good, and I hope you feel encouraged. Again, I ask anyone who disagrees with me to fact check me. If you find I made an error or accidentally misrepresented something, I encourage you to be opinionated, kind, and open-minded when you share it with me ‘cause you’re awesome and that’s how we talk to each other. 😁 Remember to also fact check me if you agree with what I shared to fight against confirmation bias. 🧐
Bonus Tracks
I love music and two songs I’ve been enjoying are Don’t Blink by Brian Wight and People by Jarvis Campbell. Links below.
Don’t Blink by Brian Wight
People by Jarvis Campbell
"A business that makes nothing but money is a poor business." -Henry Ford
Nice work! Very informative and great sources to back up your claims. I hope that everyone who reads this makes it all the way through. The economy is doing better and more people need to realize it rather than rely on gas prices or the color red/blue to determine if our country is thriving or in turmoil..
“Economies are for people, not money” is a powerful statement that many businesses need to realize. This is part of what pushed me to go back to school. I want to strive to help change current work culture and influence our version of capitalism to benefit everyone and not just a small percentage.
Do you think that part of happiness growth in jobs has to do with the improvements over time making college education easier to obtain? My thinking is this has given many opportunities to go after something they are interested in rather than settling for what job they can get just to avoid crippling debt. It’s far from perfect, but I hope the US continues to improve our education system. Another point that I feel influences that chart is the growth in work from home jobs. Some are permanent work from home, while others I know have options to work from home so many days a month. I believe it really helps manage people’s work-life balance.