The U.S. and Global Economy | Business Roundtable

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What is Business Roundtable

Business Roundtable (BRT) is an association of chief executive officers of leading U.S. companies working to promote sound public policy and a thriving U.S. economy.

Gross domestic product (GDP) totaled $18.0 trillion in the third quarter of 2015, the equivalent of approximately $56,500 per person. 

U.S. economic growth has averaged 2.0 percent during the last four quarters, below the long-run historical average of 2.7 percent (1985–2015 year to date). 

 

Labor productivity growth has averaged 0.4 percent per year since 2011, below the long-run historical average rate of 2.0 percent per year (1985– 2014).

The output gap between actual and potential GDP is more than $500 billion — equal to 3 percent of GDP — six years after the end of the 2008–09 recession. 

The United States currently ranks 51st out of 140 countries in terms of its regulatory burden for businesses and has the second most burdensome regulatory system among the world’s five largest economies.

Only 6 percent of major regulations issued by independent regulatory agencies between 2002 and 2014 underwent a full cost-benefit analysis.

Emerging market and developing economies are expected to grow at an annual rate of 4.5 percent in 2016, compared with expected economic growth of 2.2 percent among advanced economies. 

China’s economy grew by 7.4 percent in 2014, well below its 10.3 percent average growth rate over the past decade (2004–13) and its long-run historical average GDP growth rate of 9.9 percent (1985–2013). 

The European Union’s economy grew by 1.3 percent in 2014, above its 2010–13 postrecession average of 0.9 percent per year but below its long-run historical average GDP growth rate of 2.0 percent per year (1985–2013).

The economy lost 8.6 million jobs from the beginning of the recession in December 2007 through February 2010, and the unemployment rate rose to 10.0 percent in October 2009 — a level not seen since the recession of 1981–82.

The U.S. labor market surpassed peak prerecession employment in April 2014, 58 months after the recession’s official end in June 2009. 

Post-recession employment gains have been led by the professional and business services and mining and logging sectors, which grew by 21 and 18 percent, respectively, between July 2009 and October 2015. Over the same period, employment in leisure and hospitality increased by 17 percent, and employment in education and health services increased by 14 percent. 

Non-farm payrolls have added an average of 235,000 jobs per month during the last 12 months, above the long-term average of 126,000 jobs per month (1985–2015 year to date).

The unemployment rate was 5.0 percent as of October 2015, 1.1 percentage point below the long-run historical average of 6.1 percent (1985–2015 year to date) but above the 4.6 percent rate in 2007, before the recession began.

Broad unemployment — defined by the U.S. Department of Labor as all Americans who are unemployed, employed part-time for economic reasons or marginally attached to the labor force — was 9.8 percent as of October 2015, below the 20-year average of 10.7 percent but above the 2007 average of 8.3 percent, before the recession began. 

The average duration of unemployment is 7.0 months — 42 percent longer than the long-run historical average of 4.9 months (1985–2015 year to date).

The labor force participation rate stands at 62.4 percent as of October 2015, the lowest since 1977 and well below the long-run historical average of 65.8 percent (1985–2015). 

Average hourly compensation across all civilian occupations was $33.19 in June 2015, up 28 percent from a decade ago. Nearly one-third of that amount was paid in the form of non-wage benefits (e.g., health insurance, paid leave).

Average hourly earnings for non-supervisory employees (excluding benefits) have increased at an average annual rate of 2.1 percent since the recession ended in June 2009 — well below the longrun average annual growth rate of 3.0 percent (1985– 2015 year to date).

Median household incomes in the United States remain below pre-recession levels when adjusted for inflation. The median real household income was $53,657 in 2014, down 6 percent from 2007.

Households maintained by individuals with a bachelor’s or master’s degree have median incomes of $82,758 and $100,838, respectively, while households maintained by individuals with a high school diploma or the equivalent have a median income of $41,427.

Asian Americans have the highest median household income at $74,297, followed by non-Hispanic white Americans at $60,256, Hispanic Americans at $42,491 and black Americans at $35,398.

Households maintained by individuals ages 45 to 54 have the highest median income at $70,832, while those maintained by individuals ages 65 and older and ages 15–24 have the lowest median incomes at $36,895 and $34,605, respectively.

11.6 percent of American families were living in poverty (i.e., total household income below the federal poverty threshold) in 2014 — down from 15.0 percent when President Johnson declared the “War on Poverty” in 1964 but above the 9.8 percent share of families living in poverty before the recession began in 2007. 

83 percent of large U.S. metropolitan areas continue to experience poverty rates above prerecession levels.

More than 45 million Americans (nearly 15 percent of the U.S. population) participated in the Supplemental Nutrition Assistance Program in July 2015, down 2.2 percent from last year but up 8.7 percent from five years ago. 

30.3 million children participated in the National School Lunch Program — which provides means-tested free or reduced-cost lunches — on an average day during the 2013–14 school year, down from an all-time high of 31.8 million in 2010–11 but up from 28.9 million in 2003–04.

72 million adults and children were enrolled in Medicaid and the Children’s Health Insurance Program as of August 2015, up by 13.6 million enrollees from the July to September 2013 period, when the initial Affordable Care Act Medicaid Expansion began.

More than half of the population (54 percent) will experience at least one year between the ages of 25 and 60 living in poverty or near poverty, which is defined as having an income that is less than 150 percent of the official federal poverty level (e.g., $36,375 for a family of four).

The U.S. rate of homeownership was 63.7 percent in the third quarter of 2015, up slightly from an all-time low of 63.4 percent in the second quarter. In fact, homeownership has declined every year since 2004, when it peaked at 69.2 percent. 

New home foreclosures declined to roughly 95,000 in the second quarter of 2015 — the lowest number of quarterly foreclosures during the 16 years in which data have been collected. 

New household formation picked up to an annual rate of 1.3 million households in September 2015 after turning negative in 2008, but it remains below the peak of 2.4 million reached in late 2004.

The National Home Builders Association/Wells Fargo Housing Market Index (HMI) reached 64 in October 2015, a level not seen since October 2005. (Levels above 50 indicate a positive outlook for the housing market.)