The US economy has been an unprecedented success over the last several years, and new data further supports it.
First, tax revenues are increasing at a staggering rate:
The main cause of the deficit decline -- 90% of it, says White House budget director Rob Portman -- is a tidal wave of tax revenue. Tax collections have increased by $521 billion in the last two fiscal years, the largest two-year revenue increase -- even after adjusting for inflation -- in American history. [...]
As for the budget deficit, at $260 billion it is now about 2% of our $13 trillion economy, well below the 2.7% average of the last 40 years. [...] Not too shabby given that we're waging a war on terrorism and Congress spent $50 billion last year on Hurricane Katrina clean-up. [...]
If you're surprised to hear that, it's probably because inside Washington this is treated as the only secret no one wants to print.
Hat tip Kudlow.
What's nice about that scenario is that both liberals and conservatives can be happy. Liberals because government revenues are increasing. Conservatives because the wealth of citizens is increasing while they pay a smaller percentage of that wealth to gov't.
Meanwhile, employment numbers have been revised to a substantial improvement.
The US unemployment rate fell in September and previous jobs numbers were revised sharply higher according to official data released on Friday, suggesting the US labour market is tighter than previously thought. [...]
The US unemployment rate dropped to 4.6 per cent from 4.7 per cent in August, while hourly wages rose by 0.2 per cent, bringing the year-on-year increase to 4.0 per cent.
Just 51,000 jobs were added to non-farm payrolls in September, well short of analyst estimates of around 125,000. But revisions to the previous two months added an extra 61,000 jobs. Meanwhile, the government lifted its estimate of non-farm employment in the year to March by 810,000, or 0.6 per cent of the total.
That's 810K previously unnoticed jobs. As I've implied previously, the most important measure of economic success is continued wealth creation, and the single best reflection of this is job creation.
Larry Kudlow, Glenn Reynolds and the WSJ agree that it's incredibly strange this news is not being widely celebrated. The problem, of course, is that in an election season this data might been seen as helping Republicans.
Happily, I have a solution to this PR problem: have economists start sending lewd messages to teenagers!
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Update 9 Oct: WSJ has more on those newly discovered 810,000 jobs. Even though I am a poo-pooher of wage statistics as a measure of economic success, even the Krugmans of the world no longer have a complaint:
[...] the news here is that the U.S. has a very tight labor market -- which is now translating into significant wage gains. Over the past 12 months wages have climbed by 4%, which is the biggest gain since 2001 and which economist Brian Wesbury points out is higher than the 3.3% average annual wage growth of the last 25 years.
Wages up, jobs up, wealth up. Damn those supply-siders.
And, Glenn steals my joke.
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