Debt Free

The prevailing opinion in this country seems to be that the economy is crap. In a CNN/USA Today poll taken last week, 55% of those surveyed felt the economy rated a “fair” or “poor”. In addition, almost as many, 54% think the economy is actually getting worse. Are these amateur economists right? Does the average American know enough about the economy to give a qualified answer? Let's look at the Economy Stupid.

First up, the economic statistic that's probably nearest and dearest to most American's heart; per capita personal disposable income, (in 2000 dollars, to compensate for inflation) is up slightly, from $27,254 in 2004 to $27,986 in Q3 2006 (source - US Department of Economic Indicators). Total employer compensation (wages and benefits) in dollars / hr for certain groups is interesting (source - US Department of Labor):

Q2, 2004 Q2, 2006

Teachers 33.58 35.45

RNs 27.04 29.25

Construction 27.28 29.11

Manufacturing 17.77 19.39

Retail Sales 11.00 11.73

Home ownership has remained constant from Q3 2004 to Q3 2006, at approximately 69.0%. It is, however, up from Q3 2000 (67.7%), and Q3 1996(65.6%). The preceding homeownership data was compiled and reported by the U.S. Census Department. Another home ownership statistic that bears noting, between Q3, 2004, and Q3, 2006 the loan to price ratio of residential mortgages actually dropped from 77.9% to 75%. Americans are needing to borrow less as a percentage of the purchase price of their homes, even as the price of those homes continues to climb, in many markets. In others, the long awaited correction may bring homeownership back into reach of the common man without resorting to some of those, uh, creative mortgages.

How are we paying for all these homes? Are Americans working? The unemployment rate for September, 2006, was 4.6%. That's significantly better than we were experiencing in September of 2004, when unemployment was 5.4%. For all you naysayers out there that are saying “That's because they've been unemployed so long they've stopped looking” I can direct you to the statistic for average weeks unemployed. This statistic is thoughtfully provided by the D.O.L., one of the countless statistics they bring to us (It's really an insane mass of numbers over there). In September of this year, the average unemployed person had been out of work for 17.4 weeks. In the same month of 2004, it was 19.6.

The stock market is in rarefied territory, cresting 12,000 for the first time ever. Lest you think the DOW is the province of only the rich, check your 401k or 403b plan. Chances are it's substantially invested in DOW equities.

How about violent crime? While not economic news, this statistic does help to reflect the quality of life in America today. According to DOJ statistics, the violent crime rate (unless you're unfortunate enough to live in St. Louis or Detroit) has been trending down for years. In 2005, it was .21%, down slightly from .211% in 2004. In 2000, the rate was .274%, down substantially from the .416% in 1996.

So, per capita income is up, home ownership is steady, unemployment is down, those that are unemployed are out of work for less time, and the stock market is at a record high. While everything economic may not be hunk dory, it does show that approximately 55% of the American public don't know what they're talking about when it comes to the general economic situation. Where did they get that idea? So much for an unbiased media.