Page 32 - ARUBA TODAY

A32 FEATURE
Monday 18 June 2018

Why many Americans aren't benefiting from robust US economy

By JOSH BOAK dian home sales price far
WASHINGTON (AP) — "The exceeds what a typical U.S.
economy," Federal Reserve household earning a me-
Chairman Jerome Powell dian $57,000 income can
declared this week, "is do- manage.
ing very well." On top of that, 30-year
And it is. Steady hiring has fixed-rate mortgages are
shrunk unemployment to growing costlier. The aver-
3.8 percent — the lowest age interest rate on these
since the 1960's. Consum- mortgages has jumped to
ers are spending. Taxes 4.62 percent — from 3.95
are down. Inflation is tame. percent at the start of the
Factories are busy. De- year — according to mort-
mand for homes is strong. gage buyer Freddie Mac.
Household wealth is up. ___
Yet the numbers that col- THE MIDDLE CLASS
lectively sketch a picture $100 trillion. That's roughly
of a vibrant economy don't the net worth of U.S. house-
reflect reality for a range holds and nonprofits, ac-
of Americans who still feel cording to the Federal Re-
far from financially secure serve. Problem is, America's
even nine years into an wealth is increasingly lop-
economic expansion. In this Feb. 14, 2017, file photo, a woman walks on a bridge as heavy traffic moves along the 110 sided, with the affluent and
From drivers paying more Freeway during rush hour in Los Angeles. the ultra-wealthy amass-
for gas and families bear- Associated Press ing rising proportions and
ing heavier child care costs everyone else benefiting
to workers still awaiting de- don't think so. In a great booming. But even many driven prices to troubling modestly if at all.
cent pay raises and cou- economy, everybody is people who have jobs and high levels. The top 10 percent of
ples struggling to afford a thriving — and not just a are in little danger of losing It's not just that home own- the country holds 73 per-
home, people throughout certain group." them feel burdened and ership is largely unobtain- cent of its wealth, a share
the economy are strain- When analysts at Oxford uneasy. able in San Francisco or that has crept steadily up
ing to succeed despite the Economics recently studied Here's a look at the econo- Seattle. The Case-Shiller since 1986, according to
economy's gains. American spending pat- my from their perspectives: index shows that home the World Inequality Data-
They are people like Katy terns, they found that the ___ prices are rising more than base. The most sweeping
Cole, a 33 year-old music bottom 60 percent of earn- COMMUTERS 6 percent annually in At- gains are concentrated
teacher from North Creek, ers was essentially drawing Even with inflation run- lanta and Minneapolis. In among the top 1 percent;
New York, who's still repay- on their savings just to main- ning at a relatively low 2.4 the Detroit metro area, this group holds nearly 39
ing her student loans. It took tain their lifestyles. Their in- percent, one particular they're up nearly 8 percent percent of the wealth. And
her two years of working comes weren't enough to expense is weighing on over the past 12 months. By they're arguably poised to
a second job to repair her cover expenses. anyone idling in traffic: Gas- contrast, average hourly become even more pros-
credit and amass enough "Many people are still liv- oline prices have surged 24 wages have risen just 2.7 perous because Trump's
money to try to buy a home ing on a paycheck-to-pay- percent over the past year percent over the past year. tax cuts largely favored the
with her boyfriend. She just check basis," said Gregory to a national average of The real estate brokerage wealthiest slice of individu-
gave birth last month — the Daco, head of U.S. eco- $2.94 a gallon, according Redfin says the median al taxpayers.
fourth child in her blended nomics at Oxford. to AAA. That's the highest sales price in the 174 mar- Contrast that with the mid-
family — which means hav- Daco and other econo- average since 2014. kets it covers has jumped dle 40 percent of the coun-
ing to take unpaid leave mists describe the econ- Analysts at Morgan Stanley 6.3 percent over the past try, a group that would
from her school job. omy as fundamentally have estimated that the year to $305,600. A gen- historically be considered
"As far as the numbers say- healthy, a testament to increase this year will likely eral rule of thumb is that middle class. In 1986, they
ing everyone is working, the durable recovery from eat away a third of peo- buyers can afford a home held 36 percent of the
that's great," Cole said. "But the 2008 financial crisis. The ple's savings from Trump's worth roughly three times country's wealth; now, it's
is everybody surviving? I job market, in particular, is tax cuts. Gas prices are still their income. So the me- just 27 percent.q
below their high reached
roughly a decade ago. Yet
the increase this year rep-
resents an additional finan-
cial burden on consumers
and businesses compared
with a year ago.
___
HOMEBUYERS
A strong job market can
actually be a curse for
would-be homebuyers.
With more people drawing
paychecks and able to af-
ford a home, demand has
intensified. Yet the number
In this May 17, 2018, file photo, new graduates line up before of homes listed for sale is In this Oct. 16, 2014, file photo, an unemployed coal miner
the start of the Bergen Community College commencement at flirting with historic lows. The walks with his family on their way back to their apartment from
MetLife Stadium in East Rutherford, N.J. combination of high de- the bus stop in Lynch, Ky.
Associated Press mand and low supply has Associated Press