The American people have been feeling much better about the economy and inflation lately, which is a welcome reminder that the nation’s financial health is continuing to improve. According to the latest data, Americans are becoming increasingly optimistic about the country’s economic outlook due to the steady rise in consumer confidence, a record-low unemployment rate, and the lowest inflation rate since the Great Recession.
The economic surge has been fueled by strong job and wage gains, as well as consumer spending. This spending has been supported by tax cuts from President Trump’s Tax Cuts and Jobs Act of 2017, which has resulted in higher disposable incomes for most Americans. These tax cuts have come at a crucial time, when anxiety levels about the economy and inflation have been at their highest ever levels.
The Trump administration may take credit for the current state of the economy, but these improvements have also been the result of the Federal Reserve’s steady and prudent monetary policy. This policy includes modest rate hikes since December 2015, which have been designed to slow down the pace of job growth and inflation. The current inflation rate of 2.7%, as of the latest update, is the lowest since the pre-Great Recession.
Despite improvements in the economy, it is important to note that wage growth has not kept up with inflation, with wages only growing 0.3% in 2018. This wage stagnation could be due to companies being hesitant to raise wages as the tax cuts favor salaried employees. The Trump administration is hoping that tax cuts will be a catalyst for businesses to invest in people again, and that wages will start to rise more in the near future.
All in all, the American people are feeling better about the economy and inflation currently due to the economic expansion and ever-decreasing unemployment rate. The Trump Administration is hoping that their tax cuts will result in an even more robust economic recovery in the near future, with higher wages and stronger consumer spending. These encouraging economies trends should continue as we move into the New Year.