Economic Trends

 Wealth of Younger Americans 

Grows 49 Percent Since Pandemic

    Washington, D.C. — (CAP) - 4/28/2024 - A new Center for American Progress analysis finds that younger Americans are the winners of the strong economic recovery coming out of the COVID-19 pandemic, growing their wealth by 49 percent after inflation since right before the pandemic and breaking decades of stagnation.

    Millennials, in comparison to other generations, have not seen anywhere near this level of wealth accumulation during and after the pandemic. The new CAP analysis examines the latest data from the Federal Reserve and explains how younger households saw faster wealth gains than older generations during the pandemic. Some key takeaways from the new analysis include: 

• Young Americans have seen the fastest wealth growth of any group since the onset of the pandemic: Among Americans under the age of 40, average inflation-adjusted household wealth grew 49 percent since the onset of the pandemic, whereas wealth fell 7 percent for households from 40 to 54 years old and rose only 4 percent for households 55 to 69 years old.
  

• Millennials have experienced wealth growth after a recession, unlike previous generations: Millennials, who were 23 to 38 years old in 2019, saw their inflation-adjusted wealth double—increasing by 101 percent—from the end of 2019 through the end of 2023. In comparison, Generation X, who were similarly aged prior to the Great Recession (27 to 42 years old), only saw their real wealth grow 4 percent over the same four-year time period following the beginning of the Great Recession in the fourth quarter of 2007.

“Millennials have broken through decades of stagnation with historically rapid wealth growth, and this is because of the historic economic recovery after the COVID-19 pandemic recession,” said Brendan Duke, senior director of economic policy. “This rapid and broad-based wealth growth across various assets—whether that’s owning a house, liquid assets, owning a business, or decline in debts—is helping grow financial security and upward economic mobility for younger Americans.”

 Link to column by by Brendan Duke and Christian Weller, "Wealth of Younger Americans is Historicall High"

Covid-19 Impact

Retail Group: Rise in Covid-19

Cases Cause for Concern

By Steve Rensberry 

srensberry@rensberrypublishing.com

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   EDWARDSVILLE, IL - July 4, 2020 -- National Retail Federation (NRF) Chief Economist Jack Kleinhenz cited a number of positive economic signs this past month, even as the country continues to battle the Covid-19 health emergency, but expressed concerns about a prolonged recovery given the rising number of cases in the country.
    “Before we prematurely celebrate the return of the consumer, the wave of new coronavirus outbreaks spreading throughout the country are a major threat to the recovery,” Kleinhenz stated in a July 1 news release. “These outbreaks are alarming, and if they accelerate will certainly sway consumer and business confidence, taking a toll on output and employment and prolonging the time it takes to achieve a true economic recovery.”
  Kleinhenz's concerns were published in the July edition of the NRF's Monthly Economic Review. Among other things he noted:

• The U.S. economy officially entered a recession in February according to the National Bureau of Economic Research, a declaration that has usually taken from six to 18 months.
• The stock market just ended one of the best quarters it has seen since 1998, recovering almost all of the losses that it saw in the first quarter.
• Payrolls were up by 2.5 million jobs in May.
• Consumer spending was up that same month by 8.1 percent, and retail sales by about 18 percent.
• Despite the economic high points, all are below last year's levels.

“Will this recession be briefer than earlier recessions?” Kleinhenz stated. “No one has a crystal ball. And just as it can take months to be certain a recession has begun, it can take time to declare when one is over. While it would be unusual for a recession to last less than six months, it is possible that the current one could have already ended with May’s rebound. The good news is that the recession may have ended as fast as it started. The bad news is there is plenty of uncertainty on the shape of the reopening of the economy, and the recovery will be slow even if we are no longer in recessionary territory.”
   The CBIZ Small Business Employment Index (SBEI) meanwhile, showed June business hiring was “strong,” all things considered, though we're not there yet.
   A June 2 news release shared a word of cautious optimism from CBIZ Executive President Philip Noftsinger: “The June data displays the first real signs of hiring growth since the COVID-19 pandemic prompted nationwide business closures and pullbacks in March. There is a long runway for recovery, but the June data shows positive momentum. Notably, June 2020, which falls on the CBIZ SBEI's 11th year anniversary, denotes the highest reading for the index history for June.”

Other key points:

• ADP and Moody's employment report data shows private-sector employment up by 2.37 million from the previous month (seasonally adjusted)
• Small business employment was up 937,000 jobs.
• With the exception of the information industry sector, “positive hiring trends” were seen in almost every industry.
• Relatively half of the nation's small businesses, 51.4 percent, held steady with respect to employment; roughly one-third, 30.1 percent, showed gains; and the remainder, 18.5 percent, had lower employment levels.These positive trends, however, are likely to see lowered momentum in the coming weeks or months, according to the June report, with rises Covid-19 cases in certain states, forcing further restrictions on business operations.

“Before we prematurely celebrate the return of the consumer, the wave of new coronavirus outbreaks spreading throughout the country are a major threat to the recovery,” the NRF stated. “These outbreaks are alarming, and if they accelerate will certainly sway consumer and business confidence, taking a toll on output and employment and prolonging the time it takes to achieve a true economic recovery.”

Further Reference:

July Edition of NRF Monthly Economic Review 

CBIZ Small Business Employment Index (June)

Fitch Ratings' Predicts Sluggish Growth in Steel

   NEW YORK -(BUSINESS WIRE) - 7/14/2011 - Fitch Ratings' expects slower growth in steel demand and production during the second half of 2011 as developing nations fight inflation and developed nations address fiscal instability. A positive result from lower growth expectations is slowing capacity addition; global average capacity utilization at 81 percent.
    Fitch believes tight supply of low-cost iron ore and metallurgical coal will persist into 2013 resulting in raw materials prices that should exceed 2010 levels for the period. Attractive returns on iron ore and metallurgical coal projects and the benefits from backward integration for steel producers should continue to drive merger and acquisitions activity.
    Steel producers expected to show a sustainable advantage include: 1) those with raw materials integration depending on the cost position of captive capacity; 2) producers with relatively high exposure to value-added steel products given premium pricing; and 3) producers with substantial operating scale, affording the ability to temporarily curtail production during lulls to reduce costs while serving customer demand.
    Fitch expects mining and metals producers to remain disciplined through the recovery and not stretch their investment targets or their capital structure to mitigate systematic risk and geopolitical risk.
    The Rating Outlook for the global steel and steel raw materials industry sectors is Stable, with an expectation that the recovery for steel will stretch into 2013. Fitch also anticipates a soft landing for China and a slow economic recovery for developed nations.
    The full reports 'Worldwide Steel Outlook' and 'Steel raw Materials Outlook' are available on Fitch's website at 'www.fitchratings.com.'

Crisis Commission Cites Culprits Behind Meltdown

1/27/2011 - Financial Crisis Inquiry Commission says crisis was avoidable, issues comprehensive, 500-plus page report. Details of the report and a copy can be obtained here: http://www.fcic.gov/