Renters always get the same advice: Don’t spend more than 30% of your income on housing. That’s not just an anecdotal recommendation. According to the Department of Housing and Urban Development, households that spend more than 30% of their income on rent are “housing-cost burdened.” And the heavier that burden gets, the more difficult it is to afford food, utilities, and other necessary living expenses. But how feasible is the 30% rule?
Fresh data seem to suggest the U.S. economy is revving up, with growth rising at its fastest pace in two years. Yet a deeper look at the numbers reveals that strength may be overstated. . . Capital Economics estimates that a full 0.9 percent of the GDP gain in the third quarter was driven by the one-off surge in soybean exports alone — a gain the research firm expects be reversed in the final three months of the year. . . Outside of exports and inventories, meanwhile, the news for the economy was less encouraging. Consumption disappointed, residential investment dropped 6.2 percent, and equipment investment fell 2.7 percent.
Gross domestic product, a broad measure of goods and services produced across the economy, expanded at an inflation- and seasonally adjusted 2.9% annual rate in the third quarter, the Commerce Department said Friday. That was stronger growth than the second quarter’s pace of 1.4%. Economists surveyed by The Wall Street Journal expected growth at a 2.5% pace for the July-to-September period.
As an indicator of economic hardship, the US Census Bureau’s Supplemental Poverty Measure (SPM) improves on the official poverty measure by better accounting for regional differences in the cost of living as well as for the various resources (including non-cash benefits like food assistance) that families use to cover expenses.
Houston Mayor Sylvester Turner’s plan to reform the city’s three pension plans has received the backing from the Houston Police Department , Houston Fire Department and the Houston Municipal Employees, Turner said Monday. . . The plan is designed to eliminate $5.6 billion in unfunded pension liability within 30 years, but would also reduce benefits avoiding more than $2.5 billion in future costs, and include the issuance of at least $1 billion in bonds.
Here is the lesson: What some economists now call “secular stagnation” might better be termed “ordinary performance.” Most of the time, in most economies, incomes increase slowly, and living standards rise bit by bit. The extraordinary experience of the Golden Age left us with the unfortunate legacy of unrealistic expectations about our governments’ ability to deliver jobs, pay raises and steady growth.
“The technology revolution has delivered Google searches, Facebook friends, iPhone apps, Twitter rants and shopping for almost anything on Amazon, all in the past decade and a half. What it hasn’t delivered are many jobs. Google’s Alphabet Inc. and Facebook Inc. had at the end of last year a total of 74,505 employees, about one-third fewer than Microsoft Corp. even though their combined stock-market value is twice as big. Photo-sharing service Instagram had 13 employees when it was acquired for $1 billion by Facebook in 2012.”
Estimates suggest the new normal for U.S. GDP growth has dropped to between 1½ and 1¾%, noticeably slower than the typical postwar pace. The slowdown stems mainly from demographics and educational attainment. As baby boomers retire, employment growth shrinks. And educational attainment of the workforce has plateaued, reducing its contribution to productivity growth through labor quality. The GDP growth forecast assumes that, apart from these effects, the modest productivity growth is relatively “normal”—in line with its pace for most of the period since 1973.
Gross domestic product expanded at a 1.4 percent annual rate, the Commerce Department said on Thursday in its third estimate of GDP. That was up from the 1.1 percent rate it reported last month and higher than analysts’ expectations.
The survey, commissioned by POLITICO and the Harvard T.H. Chan School of Public Health, found that 51 percent of Americans expect the pace of growth to remain at about the current rate over the next 10 years. That’s a grim outlook at a time when year-over-year increases in gross domestic product have come in well below 2 percent in recent quarters.
Retail sales declined last month for the first time since March and manufacturing production slipped, government data released Thursday showed. Meanwhile, prices businesses receive for their goods and services were unchanged last month, a sign of still-soft demand at home and abroad. Companies also remain cautious about building up too much inventory, new figures showed.
Whatever your view of the past several years, America’s economic growth is not what it used to be. Our real gross domestic product roared along from 1947 to 1974, growing an average of 3.8 percent per year, and slowed only slightly until 2004. But since then, it’s dropped by half. Today’s economy, growing at a sluggish 1.6 percent per year, has been described using an old term inherited from the 1930s, “secular stagnation.”
SPM improves on the official poverty measure by better accounting for differences in the cost of living across the US. When California’s high housing costs are factored in, a much larger share of the state’s population is living in poverty: 20.6 percent under the SPM, compared to 15.0 percent under the official measure. Accounting for housing costs boosts California’s poverty rate to the highest of any state, up from 17th highest under the official poverty measure.
The median household income—the level at which half are above and half are below—rose 5.2% from a year earlier, after adjusting for inflation, or $2,800, to $56,500, the Census Bureau said Tuesday. . . The largest increases in incomes were for households in the bottom fifth of all earners, while incomes declined slightly for households in the top fifth. The ratio between incomes for households at the 90th percentile and 10th percentile declined last year.
Business Roundtable today released its third quarter 2016 CEO Economic Outlook Survey, and the results continue to underwhelm. Over the next six months, CEOs report lower expectations for sales, roughly unchanged plans for hiring, and nearly flat plans for capital spending.