A new administration is coming to Washington, D.C., but the current one is not quite done. Recently, the White House released its annual Economic Report of the President. This will of course be the last such volume produced by the Obama administration.
As reported by the Wall Street Journal, the nearly 600 page report catalogs what the administration views as its greatest successes. But the report also frames the four leading challenges facing the U.S. economy. Number one – the recent slowdown in productivity growth. This is not an issue unique to America. Average annual productivity, which represents the amount of output a worker can produce in an hour of work, has slowed to less than one percent in advanced economies over the past decade, approximately half the rate of the previous decade.
Second, income inequality. Data indicate that the share of income earned by the top one percent of all earners has risen steadily over the past three decades. Number three – the nation’s low labor force participation rate. Participation could continue to fall as more people head toward retirement. And number four, economic sustainability, which among other things focuses on issues of climate change.
