From an economic perspective, 2019 was a solid year, with continued expansion, job and wage gains, and progress on many (but not all) fronts. Let’s take a brief look back at 2019 and the past decade.
Through the year, the national economy added jobs at notable pace, frequently exceeding expectations. Job gains averaged about 180,000 per month through November, with particularly strong growth in healthcare (up 414,000 jobs), professional and technical services (+278,000), and leisure and hospitality. This pace lags that of the past decade (around 220,000 per month) but is impressive for a mature recovery period.
Twenty-five states had over-the-year increases in employment as of November, with the largest job gains occurring in Texas (+336,700), California (+321,800), and Florida (+217,400). For Texas to add more jobs than California is noteworthy given that the California economy is notably larger. In fact, Texas was among states with the largest percentage gains (which is difficult for a large economy), tying for second with Idaho (at 2.7 percent growth) and behind only Utah (up 3.2 percent).
National unemployment rates remained below four percent throughout the year, which is lower than what is viewed as optimal to allow sufficient slack for the economy to function efficiently. The strong job market pushed wages up by 3.1 percent, well above inflation.
Part of the slowing in job growth was due to a lack of available workers. Job openings remained well over seven million, with needs for particularly large numbers of workers in health care, professional and business services, and retail. However, the total number of unemployed persons is trending significantly lower (below six million). Given the inevitable mismatch of skillsets and locations, many of these openings will be difficult to fill.
For the decade as a whole, the short-term topic of greatest conversation will no doubt be the fact that, for the first time, we experienced an entire calendar decade without a recession. Despite fluctuations in key sectors, inconsistencies in policy, international events and disruptions of major proportions, and cataclysmic natural disasters, the U.S. economy managed to forge ahead.
The more profound topic that will occupy historians in the future, however, will be the fundamental shift in the global energy markets that emerged. The U.S. rose to the forefront of production, new technologies were implemented, major investments in infrastructure were undertaken, and supply and demand patterns throughout the world were completely reoriented. Fortunately, Texas and, in particular, the Permian Basin lie at the epicenter of this phenomenon, which will have positive implications for centuries to come.
We enter a new decade with plenty of daunting challenges (topics for another day), but also with a solid foundation on which to build a better economic future. Happy New Year!!
