January 4, 2008
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Treasury Economic Update 1.4.08

"Today's employment report reflects the impacts of the challenges facing the U.S. economy, including the housing downturn and the credit disruption. At the same time, the U.S. economy remains resilient, and we expect growth to continue."

Assistant Secretary Phillip Swagel, January 4, 2007

Job Creation Has Slowed: 

Job Growth: 18,000 new jobs were created in December, the 52^nd straight month of job gains. The United States has added 1.3 million jobs in the past 12 months and about 8 and a half million jobs since August 2003.  Employment increased in 48 states and the District of Columbia over the year ending in November. (Last updated: January 4, 2008)

Low Unemployment: The unemployment rate rose to 5.0 percent in December from 4.7 percent in November.  Unemployment rates have declined in 23 states and the District of Columbia over the year ending in November. (Last updated: January 4, 2008)

There Are Still Many Signs of Economic Strength:

Economic Growth: Real GDP growth was 4.9 percent in the third quarter of 2007, supported by strong gains in business investment and exports. (Last updated: December 20, 2007)

Business Investment: Business spending on commercial structures and equipment rose solidly in the third quarter.  Healthy corporate balance sheets bode well for continued investment growth. (Last updated: December 20,2007)

Exports: Strong global growth is boosting U.S. exports, which grew by 10.3 percent over the past 4 quarters. (Last updated: December 20, 2007)

Inflation: Core inflation remains contained.  The consumer price index excluding food and energy rose 2.3 percent over the 12 months ending in October. (Last updated: December 14, 2007)

Tax Revenues: Tax receipts rose 6.7 percent in fiscal year 2007 (FY07) on top of FY06's 11.8 percent increase.  As a share of GDP, FY07 receipts exceeded their 40-year average. (Last updated: October 12, 2007)

Americans Are Keeping More of Their Hard-Earned Money:

Real after-tax income per person increased 2.1 percent over the past 12 months (ending in November). (Last updated: December 21, 2007)

Pro-Growth Policies Will Enhance Long-Term U.S. Economic Strength:

We are on track to make significant further progress on the deficit. The FY07 budget deficit was down to 1.2 percent of GDP, from 1.9 percent in FY06.  Much of the improvement in the deficit reflects strong revenue growth, which in turn reflects the continued strength of the U.S. economy.  Looking ahead, higher spending on entitlement programs dominates the future fiscal situation; we must squarely face up to the challenge of reforming these programs. 

www.treas.gov/economic-plan