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Lower growth has been accompanied by—and may be one of the reasons why—real median household incomes in 2015 that were actually 2.5% lower than they were in 1999.
Lower growth has been accompanied by—and may be one of the reasons why—real median household incomes in 2015 that were actually 2.5% lower than they were in 1999.

US Economic Confidence Declines

the percentage of middle class households has actually shrunk over time. In 1971, 61% of households were considered middle class, but that percentage was only 50% in 2015

US Economic Confidence Declines

The latest report released by the IBD/TIPP revealed that economic optimism index in the US declined 3.6 points, or 6.5%, in April, posting a reading of 51.7 vs. 55.3 in March 2017.
The six-month economic outlook, a measure of how consumers feel about the economy’s prospects in the next six months, declined 2.5 points, or 4.7%, to 51.1.  The sub-index was 32.1 when the economy entered the last recession in December 2007, FXStreet reported.
The personal financial outlook, a measure of how Americans feel about their own finances in the next six months decreased 1.3 points, or 2.1%, to 61.3.
Confidence in federal economic policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, dropped 7.0 points, or 14.1%, to 42.6.
“Despite a little weakness in confidence compared to previous months, our index continues to be in optimistic territory. Fifty-two percent believe that the economy is improving,” said Raghavan Mayur, president of TechnoMetrica, IBD’s polling partner.
Index readings above 50 indicate optimism; below 50 indicate pessimism.

 The Breakdown
This month, 11 of the 21 demographic groups that IBD/TIPP tracks were above 50 on the economic optimism index. Three groups improved on the index, while 18 declined.  
On the economic outlook component, 10 of the 21 groups that IBD/TIPP tracks scored in optimistic territory.  Four groups improved on the component, while 16 declined. One did not change.
On the personal financial component, 21 groups IBD/TIPP tracks scored in optimistic territory. Six groups increased, while fifteen declined.
On the federal policies component, only one of the 21 demographic groups tracked was above 50. Three groups advanced on the component and eighteen declined.

 Something Is Wrong
JPMorgan CEO Jamie Dimon thinks the United States is “truly an exceptional” country. But despite having the world’s largest economy, Dimon writes in his latest letter to JP Morgan shareholders that, “it is clear something is wrong—and it’s holding us back”, Yahoo Finance reported.
“Our economy has been growing much more slowly in the last decade or two than in the 50 years before then,” Dimon writes.
“From 1948 to 2000, real per capita GDP grew 2.3%; from 2000 to 2016, it grew 1%. Had it grown at 2.3% instead of 1% in those 17 years, our GDP per capita would be 24%, or more than $12,500 per person higher than it is. US productivity growth tells much the same story.”
“Our nation’s lower growth has been accompanied by—and may be one of the reasons why—real median household incomes in 2015 were actually 2.5% lower than they were in 1999,” Dimon adds.
“In addition, the percentage of middle class households has actually shrunk over time. In 1971, 61% of households were considered middle class, but that percentage was only 50% in 2015.”
Dimon also cites the trillions spent on foreign wars, the hundreds of billions of dollars in student debt accrued by Americans in the last several years, rising healthcare costs, and a rise in felony convictions as factors holding back the economy.

 Five Points
The core of Dimon’s downbeat assessment of why the US economy is being held back by largely self-inflicted means comes down to five points:
1. labor force participation is too low
2. education is leaving too many workers behind
3. infrastructure investment is lacking
4. corporate taxes are driving investment overseas
5. regulations are holding back the private sector
The final three points are the kinds of complaints one expects from a business leader when assessing what ails the US economy. Regulations and taxes are the kinds of perpetual nags that the corporate sector is likely never to be at ease with.
Dimon’s first point, however, is something that has become a larger concern among economists and business leaders in the last several years.
In this, Dimon highlights the so-called “missing men” of the US economy, or the prime working age American men who are simply not in the labor force.

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