Econ Outlook

Where's the wreck?

   New home sales are at a nine-year high, the international trade deficit is closing, exports are increasing, inflation is steady, unemployment is below 5 percent and job growth in America has increased for 70 consecutive months.
   So where's the disaster that some folks keep warning of?

   Some 654,000 homes were sold in the U.S. in July, up 12.4 percent from June and up 31.3 percent from a year ago, according to Census Bureau data.
   New monthly export records were set in telecommunications, computer and information services, and the goods and services trade deficit faded by 2.3 percent from a year ago, the Commerce Department reported.
   "Despite global economic headwinds," said Commerce Secretary Penny Pritzker, "U.S. goods and services are in high demand."
   Employment in America rose by 255,000 in July as the unemployment rate held steady at 4.9 percent. Since early 2010, U.S. businesses have added 15 million jobs.
   Economic growth as measured by Gross Domestic Product (GDP), the total output of goods and services, is likely to continue over the next few years, according to a report by the Congressional Budget Office (CBO), driven largely by consumer spending and business investment.
   Even so, the CBO estimated rising deficits. Put into the context of the total economy, the anticipated deficit of $590 billion for 2016 will be just 3.2 percent of some $16 trillion in GDP.
   Here's a reality check: Low skill jobs with high wages have been gone from most regions of the U.S. for decades, and are not likely to return. They have been replaced by higher skill jobs in technology and other areas that call for higher educational levels.
   This is not to say that low skill jobs no longer exist. They do, but largely in service areas. And many manufacturing jobs call for higher skills in order to operate more technical machinery, which allow increased production with less labor.
   Moreover, concerns over pollution and global warming will bring even higher technology to energy industries as the nation moves away from coal as a prime energy source.

   So is the nation trembling, and in danger of another economic crisis? Not really, unless irresponsible political and corporate leadership, coupled with offshore storm winds, bring on some extended fiscal and financial rainy days.