A strong trade agreement with Mexico and Canada is clearly a "win" for the US economy. While the US-Mexico-Canada Agreement (USMCA) must still pass the US Senate and be ratified in its revised form by Mexico (which has some concerns) and Canada, it appears that a structure has been essentially finalized to replace the 25-year old North American Free Trade Agreement (NAFTA). The original pact redefined the economies of the entire continent, and the next generation will allow the momentum to continue.
Paul A. Volcker, who recently passed away, was a giant figure in modern economics. As head of the Federal Reserve, he took bold and unpopular steps to solve major economic problems, setting the stage for the prosperity we enjoy today, including the two longest expansions in US history.
New rules restricting access to the Supplemental Nutrition Assistance Program (SNAP) are going to cause hundreds of thousands of Americans to lose benefits. Even beyond the obvious physical and mental costs of food insecurity and the incalculable toll on the stability and dignity of families around the country, there is also a significant economic cost. Our analysis found that it will lead to losses of billions of dollars and tens of thousands of jobs.
Competition to attract corporate locations, particularly high-profile locations, is typically intense, and decades of evidence has shown that communities must be proactive and innovative to increase their chances of success. Economic development programs can enhance opportunities and prosperity, but given the reality of scarce resources, communities must be efficient and analytical in their efforts. We recently produced a report, in conjunction with the Texas Economic Development Council, which is a framework for thinking about economic development (available free at www.perrymangroup.com). Here's a quick look at a few key points.
The major drivers of much of the economic activity across the state are Texas' largest metropolitan statistical areas (MSAs). Our long-term forecast for these population centers indicates continued expansion. Let's take a quick look at our projections for growth through 2045.
The Texas economy is among the strongest in the nation, and the state continues to chalk up wins in terms of major corporate locations. Recent growth and the ongoing stream of new and expanding businesses is signaling an upward trend over the long term. In fact, in the latest release of output data by the Bureau of Economic Analysis, Texas ranked first in percentage increase, a remarkable achievement for such a large state (but one that occurs frequently).
The US economy is well positioned for long-term growth, and our latest forecast indicates expansion at a moderate pace. Jobs continue to be added at a notable rate, and other signals are generally positive. For example, the housing market has finally worked through the major problems of the Great Recession, a positive signal for expansion. At the same time, trade issues remain unresolved and labor shortages are impediments to optimal performance.
The US labor market is tight, with national unemployment rates well below the 4% level commonly considered "full employment." There is perhaps some modest slack, with millions unemployed and others working part-time when they'd rather be working full time. Nonetheless, there are ample signs that even this limited supply of potential workers is diminishing in most markets and industries.
Often, the Nobel Prize in Chemistry involves advances that, while important, are difficult to comprehend for mere mortals (it took my late friend Rick Smalley many attempts before I came to somewhat grasp the mysteries of nanotechnology that led to his Prize in the 1990s). This year is different. The discoveries enabled by the three scientists who won this year affect technologies we hold very near and dear and use daily (many of you even as you read this column).
It is widely known that, in general, more education leads to higher incomes. The US Bureau of Labor Statistics tracks median weekly earnings by education level, and recently released a summary of results going back to 2010. The differences are striking and undeniable.