Between 2021 and 2022, average annual grocery prices were up 11.4%, the highest increase since 1979 . Watch Just the Facts with Steve Ballmer & USAFacts. The more we know, the better voters we can be.
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00:00Hi, I'm Steve Ballmer.
00:02I spent 34 years growing Microsoft,
00:0510 years owning the L.A. Clippers basketball team.
00:08I love computers, data, and facts.
00:11That's why I started USAFacts,
00:14to help understand what our government is up to
00:17and what's going on in America.
00:19I'll share with you the facts and data,
00:22all from our government.
00:24You make up your own mind.
00:26In this episode of Just the Facts,
00:28the U.S. economy in your pocketbook.
00:31But first, a quick disclaimer.
00:33As I talk, I do a lot of rounding of numbers,
00:37but the data you see on screen will be more exact.
00:40Things might have changed since I recorded this in mid-June.
00:44I can't predict the future,
00:46but I'll be reading about it when it happens.
00:49So now, let's roll.
00:52Let's take a look at the economy
00:54and how it is working or not working for you.
00:58Economists measure the economy
01:00by looking at what they call the Gross Domestic Product,
01:04or GDP.
01:06It's the market value of all the products and services
01:10created in a year by our economy.
01:13Our GDP was over $27 trillion in 2023.
01:20Let's look at growth,
01:22real growth, which is GDP growth adjusted for inflation.
01:27We went from 2.5% growth in 2019
01:31to negative 2.2% in 2020 when COVID hit,
01:35to a surge of 5.8% in 2021 during the recovery,
01:41and now to about 2.5% in 2023.
01:45In 2023, real GDP per person in the United States
01:51reached a high of $81,624,
01:56which is up 2% from 2022.
01:59While GDP is a pretty good way to measure
02:01how well the economy is doing for the U.S. as a whole,
02:05it doesn't necessarily describe
02:07how the economy feels to the average American.
02:12For that, we need to look at statistics like jobs,
02:16wages, and spending.
02:19On jobs, let's start by looking at unemployment.
02:22In February of 2020, a month before the COVID outbreak,
02:26unemployment was a low 3.5%.
02:30But by April of 2020, about a month into the pandemic,
02:34the unemployment rate had already shot up to 14.8%.
02:39But in January of 2023, it hit 3.4%.
02:44As of May 2024, it's at 4%.
02:49So next up is inflation.
02:51We hear a lot about inflation, but what is it?
02:55In layman's terms, it's the rate at which
02:58the prices of things you buy increases.
03:01To measure inflation, let's start by looking
03:04at the Consumer Price Index, or CPI,
03:07a government official measurement of inflation
03:11that includes a representative basket
03:14of the goods and services that people buy.
03:17The CPI growth hovered monthly
03:20between 1.5% and 2.3% in 2019,
03:25the year before the pandemic.
03:27It skyrocketed to a high of 9% in June of 2022.
03:33As of May of 2024, it's down to 3.3%.
03:38But even as the rate of inflation comes down,
03:41it does not erase the impact
03:44of accelerated price increases over time.
03:48The cumulative increase in the cost of goods and services
03:52before the pandemic?
03:54About 19%.
03:56In 2019, the average cost of a gallon of gas was $2.60.
04:02By 2022, the average was nearly $4.
04:07And in the month of June, it was nearly $5 a gallon.
04:12In 2023, the average cost lowered somewhat
04:15to $3.52 a gallon.
04:18Let's zoom in on two other costs
04:20people frequently focus on, housing and food.
04:24Overall, the cost of housing, rental price,
04:28and the owner's equivalent of rent
04:31has increased 21% since January of 2021.
04:35If we take a longer-term perspective,
04:37cost of homes is outpaced wage growth
04:40with home costs up 74% and wages up 54%
04:45between 2010 and 2022.
04:48Let's look at food, specifically the cost of groceries.
04:52Between 2021 and 2022,
04:55average annual grocery prices were up 11.4%,
05:00the highest increase since 1979,
05:03and they grew another 5% between 2022 and 2023.
05:08From 2019 to 2023,
05:11the cost of groceries and eating out rose by 25%,
05:16compared to 19% for the overall CPI growth.
05:21Now I want to step back with a little sidebar.
05:24To combat inflation, we have empowered the Federal Reserve.
05:28They apply the brakes by raising interest rates.
05:32That's what they have done for the last two years
05:36once inflation started really heating up.
05:39That sent the interest rates for getting a mortgage up
05:43from under 3% a year to 7% for most people,
05:48and that's higher than any point between April of 2002
05:52and October of 2022.
05:56Let's do a fact check.
05:58Real GDP per capita, all-time high in 2023,
06:02of nearly $82,000.
06:05Unemployment, down to 4%.
06:08Inflation rate, down close to 3%,
06:11but key expenses like energy, food, and housing
06:14are more than 20% more expensive
06:17than they were at the start of 2021.
06:20Okay, so let's now talk about how folks are doing.
06:23U.S. employers added about 3 million jobs in 2023.
06:28That grew our workforce to 159 million people.
06:32During the pandemic, we first lost jobs,
06:36and then we gained jobs back,
06:3928 million since the low in employment in April of 2020.
06:44There's been a gain of 6 million jobs total
06:47since right before the pandemic.
06:50Now let's look at the bottom line.
06:52Are Americans getting ahead or falling behind?
06:56The median wage, which includes salary,
06:59base wages, commission, tips,
07:02the income you earn from working,
07:05has increased by nearly $8,250
07:08since before the pandemic in 2019.
07:12It moved from $39,810 in 2019
07:16to $48,060 in 2023.
07:20That seems pretty good,
07:22but once you take inflation into account,
07:25that $8,250 increase quickly shrinks
07:29to a little bit more than $613
07:32in wage increases in four years,
07:35a 2% increase.
07:37To really get a picture of what folks have to live on,
07:40we will look at three factors,
07:42income, how much you have to pay in taxes,
07:45and what you receive in government benefits.
07:48There's market income,
07:50the money a family makes from wages
07:53and investments in individual retirement accounts,
07:57as well as the healthcare that's paid for by your employer.
08:01Then subtract taxes, federal, state, and local.
08:06Add to that government benefits like Social Security,
08:10food stamps, refundable tax credits,
08:13and even services like Medicaid and Medicare.
08:16Let's do the math.
08:18I want to divide the population into 20% chunks.
08:23And let's start by looking at the 20% of American families
08:28that are in the middle.
08:30They have an average market income of $64,417.
08:35Then subtract their average taxes of $21,620
08:41and add back in an average of $25,778 of government benefits.
08:49So the 20% in the middle
08:51ended up with an average of $68,575 to support their life.
08:59So how has this picture changed?
09:01Compared to 2000, it's a decrease of 1% in market income,
09:07an increase of 3% in taxes.
09:10Remember, income, property, sales, Social Security, and the like,
09:14and a much larger increase of 74% in government benefits.
09:20This is all adjusted for inflation.
09:23The bottom 20% had an average income of $2,800 in 2022
09:29and received $33,000 in government benefits
09:33and paid an average of $4,400 in taxes.
09:38That ends up with $31,400.
09:42How about the top 1% of Americans?
09:45They made a minimum of $941,776.
09:51The average for this group is $2.9 million of income
09:57minus an average of $1.3 million in taxes
10:02plus an average of $20,000 in government benefits.
10:06This group ended up with a little bit over $1.6 million
10:11after taxes and benefits.
10:15Family incomes are also lowered by two demographic shifts.
10:19First, people are more likely to live alone today
10:23than any time in the past.
10:2529% of households today consist of individuals living alone
10:31without a child compared to 13% in 1960.
10:36Second, a greater share of the population is over 65,
10:41increasing from 13% of the total in 2010 to nearly 18% in 2023.
10:48More retirees rely on income from Social Security
10:52and support from government services like Medicare.
10:55Another way to assess income is by looking at the number
10:59where half of the households now, not families,
11:03are below that income and half the households are above.
11:07That number is the median.
11:09Median household income differs by race and ethnicity.
11:14With Asian households having the highest median income
11:17of $108,700,
11:21followed by non-Hispanic white households at $81,060,
11:28those are both above the national median.
11:31Hispanic households had a median income of $62,800,
11:37while black households had a median income of $52,860,
11:43which are both below the national median.
11:46What about poverty in our country?
11:48How is that measured?
11:50There isn't a specific income number.
11:52Rather, the Census uses a set of money income thresholds
11:57that vary by family size and composition
12:00to determine who is in poverty.
12:03As an example, in 2023,
12:05a family of four with two children was in poverty
12:09if the household income was below $30,900.
12:14The poverty rate in 2022 was 11.5%,
12:18or just under 38 million people.
12:21And 15%, actually, of all children are in poverty.
12:25Another factor in standard of living
12:27is that more employees are getting retirement benefits,
12:31paid vacation time, sick leave,
12:34and family leave than they were in 2010.
12:37Paid sick leave went from 67% of employees
12:41to 80% in 2023.
12:44Paid family leave went from 11% to 27%.
12:49An increasing share of Americans
12:51have retirement accounts these days, too,
12:54with 54% of families having a retirement account in 2022
13:00compared to 37% in 1989.
13:04So let's do a fact check.
13:06Unemployment, 4%,
13:08down from the recent peak of the pandemic at 14.8%.
13:13Inflation, 3.3% down
13:16from the recent high of 9% in 2022.
13:20Consumer prices, up 19% since the pandemic.
13:24Job growth, 6 million new jobs from the start of the pandemic.
13:29Mortgage rates, up to 7%.
13:32Wages, up 2% since the pandemic
13:36after adjusting for inflation.
13:39That wraps it up on the economy.
13:41My personal view,
13:43I continue to be amazed at the innovation and dynamism
13:47of the U.S. economy and the work ethic of Americans.
13:50The American worker and American economy
13:53should never, ever be underestimated.
13:56The combination of the innovation in our country
13:59and freedom is hard to beat.
14:01That's it for the economy.
14:03Thanks for hanging in there.
14:05I hope you agree,
14:06the more we know, the better voters we can be.
14:10Just the facts from USA Facts.
14:12You decide what you believe.