Why many Americans aren't benefiting from robust US economy
WASHINGTON — “The economy,” Federal Reserve Chairman Jerome Powell declared this week, “is doing very well.”
And it is. Steady hiring has shrunk unemployment to 3.8 percent — the lowest since the 1960’s. Consumers are spending. Taxes are down. Inflation is tame. Factories are busy. Demand for homes is strong. Household wealth is up.
Yet the numbers that collectively sketch a picture of a vibrant economy don’t reflect reality for a range of Americans who still feel far from financially secure even nine years into an economic expansion.
From drivers paying more for gas and families bearing heavier child care costs to workers still awaiting decent pay raises and couples struggling to afford a home, people throughout the economy are straining to succeed despite the economy’s gains.
They are people like Katy Cole, a 33 year-old music teacher from North Creek, New York, who’s still repaying her student loans. It took her two years of working a second job to repair her credit and amass enough money to try to buy a home with her boyfriend. She just gave birth last month — the fourth child in her blended family — which means having to take unpaid leave from her school job.
“As far as the numbers saying everyone is working, that’s great,” Cole said. “But is everybody surviving? I don’t think so. In a great economy, everybody is thriving — and not just a certain group.”
When analysts at Oxford Economics recently studied American spending patterns, they found that the bottom 60 percent of earners was essentially drawing on their savings just to maintain their lifestyles. Their incomes weren’t enough to cover expenses.
“Many people are still living on a paycheck-to-paycheck basis,” said Gregory Daco, head of U.S. economics at Oxford.
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