Hidden in the Numbers

The media tends to grab on the most obvious economic statistics because they are easier to understand and constitute a more discernible trend line. So, this month’s announcement that the economy added 303,000 jobs was seen as a welcome surprise. In fact, it was the third month of increases month over month and marked the 39 th month in a row where there were net job additions to the economy. Buried in the numbers and less reported is that the increase in wages and the decrease in inflation has resulted in incomes surpassing the rate of inflation this year. All this coupled with record corporate profits.

Inflation is still an issue year over year at 3.4%. Closer to the Fed target of 2% and a far cry from the 8% rate of just a year ago. All good but what is even more striking and more deeply hidden is that according to Bank of America the monthly median value of savings and checking balances is more than 40% higher for all income levels than it was in 2019. That is an amazing statistic. The old saying in a surging tide all boats will rise seems to be coming about despite increased interest costs and inflation.

Something is working. We are now in the third year of an approach that attempts to build the economy from the bottom up and the middle out. Instead of tax cuts for the rich it is incentives and public expenditures that benefit us all. We are still going to have to address the deficit issue but now is the time to raise taxes on corporate profits and see if we can sustain this growth for the longer term. Common Sense tells us that the time to fix the roof is when the sun is shining. Something previous administrations failed to do.

Let’s not waste this opportunity to harness the economy for the public good and pay off the debts that previous attempts at economic stimulus have incurred. Seems like a good idea to me.