And here’s yet another reason to be grateful this Thanksgiving: the economy in 2020 is set to have a better year. In 2019, the housing market had to absorb the effects of two years of rising interest rates and businesses had to deal with tariffs and uncertainty from Trump’s ill-conceived and badly executed trade war, global economic weakness, and the fading fiscal boost from the 2017 deficit-financed Republican tax cut.
Events in 2020 will not reverse all of this, of course. The withdrawal of fiscal stimulus will be an economic headwind next year. And the president’s trade policy has been so erratic it is hard to see how the administration could credibly signal to businesses that policy will be stable enough for them to make major investment decisions.
But the most likely scenario is that the U.S. and China are on track for a truce in their trade war, which could result in no further tariff increases and a pickup in U.S. agriculture exports to China. (The U.S. may even roll back the 15% tariffs on around $100 billion of Chinese goods imposed on Sept. 1, as well.) The housing market is already improving following this year’s interest rate cuts, and consumers continue to spend.
If the economy indeed strengthens modestly next year, the employment rate is likely to keep climbing. It is plausible that the rate could close in on its year-2000 record high before the next recession.
This positive news should not obscure the need for pro-employment public policy. Measures should be taken to increase geographic mobility to help connect workers with jobs, help workers build the skills they need to command higher wages, strengthen earnings subsidies for low-income households to boost employment and fight poverty, and reduce barriers to employment in the labor market, like excessive occupational licensing requirements.
In the meantime, think about the benefits Americans already enjoy from the progress on employment that has already been made. An additional percentage point in the employment rate means 1.3 million more people with jobs, contributing to society through the market, supporting their families and enjoying the dignity and fulfillment that comes from work.
This Thanksgiving, be grateful for that progress.
This article was provided by Bloomberg News.