The GDP report is about to potentially a not 2%, 3%, but 4% growth. The question is what does it all mean? During and for the first few years after the Great Recession I spent a fair amount of time talking about the implications of economic growth. Here's a quick recap of this research. 1%, an economy that's at imminent risk of recession and doesn't create enough jobs to support population growth. At 2%, the status-quo economy. It creates just enough new opportunity to make slow employment progress but generally not enough to spur wage growth. At 3%, this is an economy that creates more jobs than population growth and produces demand for them. It also produces meaningful wage growth.
The secret of the success of the United States is that our growth rate has averaged 3.1% for its history. That's why despite recessions, wars and tumult, every generation has always fared better than the one before. This is how the US economy became the largest in the world in under 150 years. The issue for the current generation of young adults is that our country hasn't been delivering on its promise or potential. After delivering economic growth of 2.8% last year, best since 2005, what today's report shows is that the US is back, and you've already been feeling it.
These are some examples of how the US is gaining economic growth. The stock market, retirement account balances and corporate profits are all at all-time highs. The net take-home pay is up by the most year over year in 32 years. We have record low minority unemployment rates and record low unemployment rate for women.
That's what the US economy is showing and what getting its groove back means to you.
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