Council of Economic Advisers Blog

  • The Employment Situation in December

    Today’s solid employment report caps off a strong year for the U.S. labor market, which achieved a number of important milestones in 2014. Total job growth last year was the strongest since 1999, while the unemployment rate fell at the fastest pace in three decades. Although nominal wages fell in December, inflation-adjusted wages have generally been rising, and job growth has picked up in sectors that traditionally provide good, middle-class jobs. This week, the President has been laying out his vision to build on this progress by increasing access to community college, supporting the recovery in the housing sector and investing in U.S. manufacturing. On top of these steps, the President looks forward to working with Congress and taking action on his own authority to invest in America’s infrastructure, close tax loopholes and encourage job creation in America, support working families, expand overseas markets for American goods and services, make common-sense reforms to the immigration system, and raise the minimum wage. 

    FIVE KEY POINTS IN TODAY’S REPORT FROM THE BUREAU OF LABOR STATISTICS

    1. The private sector has added 11.2 million jobs over 58 straight months of job growth, extending the longest streak on record. Today we learned that total nonfarm payroll employment rose by 252,000 in December, mainly reflecting a 240,000 increase in private employment. Private-sector job growth was revised up for October and November by a combined 50,000 so that over the past three months, private-sector job growth has averaged 280,000 per month. Private employment has risen by at least 200,000 for 11 consecutive months, the first time that has happened since the 1990s. 

  • Third Estimate of GDP for the Third Quarter of 2014

    Today’s upward revision indicates that the economy grew in the third quarter at the fastest pace in over a decade. The strong GDP growth is consistent with a broad range of other indicators showing improvement in the labor market, increasing domestic energy security, and continued low health cost growth. The steps that we took early on to rescue our economy and rebuild it on a new foundation helped make 2014 already the strongest year for job growth since the 1990s. Indeed, 2014 was a breakthrough year for the United States across a wide range of metrics important to middle-class families. Nevertheless, there is more work to be done to ensure that all Americans can share in the accelerating recovery.

    FIVE KEY POINTS IN TODAY’S REPORT FROM THE BUREAU OF ECONOMIC ANALYSIS

    1. Real gross domestic product (GDP) grew 5.0 percent at an annual rate in the third quarter of 2014—the strongest single quarter since 2003—according to the third estimate from the Bureau of Economic Analysis. While quarterly growth reports are volatile, and some of the growth in Q3 reflected transitory factors, the recent robust growth data indicate a solid underlying trend of recovery. Indeed, the strong growth recorded in each of the last two quarters suggests that the economy has bounced back strongly from the first-quarter decline in GDP, which largely reflected transitory factors like unusually severe winter weather and a sharp slowdown in inventory investment. Consumer spending, business investment, and net exports all remained positive contributors this quarter. Real gross domestic income (GDI), an alternative measure of the overall size of the economy, was up 4.7 percent in Q3.

  • 2014 Has Seen Largest Coverage Gains in Four Decades, Putting the Uninsured Rate at or Near Historic Lows

    Earlier this week, the National Center for Health Statistics released new data on health insurance coverage during the second quarter of 2014, the first federal survey data that largely capture the effects of the Affordable Care Act’s first open enrollment period. These new data confirm earlier findings that 2014 has seen dramatic reductions in the share of Americans without health insurance, reductions that correspond to an estimated 10 million people gaining coverage since before the start of open enrollment.

    This progress is even more striking when viewed in historical context. Building on work by other researchers, the Council of Economic Advisers has constructed estimates of the share of Americans without health insurance extending back to 1963. These estimates show that the drop in the nation’s uninsured rate so far this year is the largest over any period since the early 1970s, years in which the Medicaid program was still ramping up and the Medicare and Medicaid programs were expanded to people with disabilities.

    With this year’s decline, the nation’s uninsured rate is now at or near the lowest level recorded across five decades of data. Furthermore, new data out today on Medicaid enrollment and data on Marketplace plan selections from earlier this week show that progress in reducing the number of uninsured Americans is continuing. 

  • The Employment Situation in November

    Job growth in November was strong, and the economy has now already added more jobs in 2014 than in any full calendar year since the late 1990s. To create an environment in which this progress can continue, it is critical that Congress take the basic steps needed to fund the government and avoid creating disruptive and counterproductive fiscal uncertainty. We have an opportunity to work together to support the continued growth of higher-paying jobs by investing in infrastructure, reforming the business tax code, expanding markets for America’s goods and services, making common sense reforms to the immigration system, and increasing the minimum wage.

    FIVE KEY POINTS IN TODAY’S REPORT FROM THE BUREAU OF LABOR STATISTICS 

    1. The private sector has added 10.9 million jobs over 57 straight months of job growth, extending the longest streak on record. Today we learned that total nonfarm payroll employment rose by 321,000 in November, mainly reflecting a 314,000 increase in private employment—the third strongest month for private payrolls over the past 57 months. Private-sector job growth was revised up for September and October by a combined 32,000, so that over the past three months, private-sector job growth has averaged 266,000 per month. Private employment has risen by at least 200,000 for ten consecutive months, the first time that has happened since the 1990s. In addition, the average workweek in the private sector rose to 34.6 hours in November, the highest since 2008.

  • Historically Slow Growth in Health Spending Continued in 2013, and Data Show Underlying Slow Cost Growth Is Continuing

    New data out today from the Office of the Actuary at the Centers for Medicare and Medicaid Services confirmed that 2013 was another year of historically slow growth in health care spending and that 2011, 2012, and 2013 saw the slowest growth in real per capita health care spending on record. Today’s data make it increasingly clear that the recent slow growth in the cost of health care reflects more than just the 2007-2009 recession and its aftermath, but also structural changes in our health care system, including reforms made in the Affordable Care Act. As we have noted previously, if even a portion of the recent slowdown continues, the benefits for Federal and State budgets, families’ budgets, and the economy as a whole will be dramatic.

    The remainder of this blog post takes a closer look at today’s report and what it can tell us about the drivers of recent trends. We also take a look ahead at 2014 using other data that are already available. Available data suggest that aggregate spending may be growing more quickly as millions of people gain health insurance coverage and access needed care. But the available data also show that health care prices, premiums, and per-enrollee costs—the factors that determine the costs families face—have continued to grow very slowly during 2014.    

  • Second Estimate of GDP for the Third Quarter of 2014

    Today’s upward revision affirms that economic growth in the third quarter was strong, consistent with a broad range of other indicators showing improvement in the labor market, increasing domestic energy security, and continued low health cost growth. Since the financial crisis, the U.S. economy has bounced back more strongly than most others around the world, and the recent data highlight that the United States is continuing to lead the global recovery. Nevertheless, there is more work to be done to boost growth in the United States and around the world. The President’s common-sense administrative actions on immigration—which CEA estimates will raise GDP by at least 0.4 percent over 10 years—will contribute to this effort, but only Congress can finish the job and make progress on other important steps like increased infrastructure investment.

    FIVE KEY POINTS IN TODAY’S REPORT FROM THE BUREAU OF ECONOMIC ANALYSIS

    1. Real gross domestic product (GDP) grew 3.9 percent at an annual rate in the third quarter of 2014, according to the second estimate from the Bureau of Economic Analysis. The solid growth recorded in each of the last two quarters suggests that the economy has bounced back strongly from the first-quarter decline in GDP, which largely reflected transitory factors like unusually severe winter weather and a sharp slowdown in inventory investment. In the third quarter, net exports made a large positive contribution to growth, while consumer spending and business investment remained positive contributors but grew at a somewhat slower pace than the previous quarter. Real gross domestic income (GDI), an alternative measure of the overall size of the economy, was up 4.5 percent in Q3.