CARDIFF GARCIA, HOST:
Hey, everyone. Cardiff and Stacey here as THE INDICATOR FROM PLANET MONEY goes careening into the holiday season.
STACEY VANEK SMITH, HOST:
It does feel like that. Careening's a good word - yes, it feels like the holidays are careening at us.
GARCIA: Thank you. I feel like that was well-chosen.
VANEK SMITH: Yeah, no, that's a really good word.
GARCIA: The 2010s were, let's just say, a busy decade for the U.S. and global economies.
VANEK SMITH: (Laughing) Action-packed.
GARCIA: Absolutely. Both of them, the U.S. and global economies, were emerging from the brutal financial crisis and recession that finished the last decade.
VANEK SMITH: Europe was in chaos back when it looked like some countries might stop using the euro. There were debt ceiling crises here at home, big fluctuations in the prices of oil and food.
GARCIA: Plus recessions, deep ones in emerging markets like Brazil and Russia. And the U.K. voted to Brexit from the European Union. More recently, trade wars. And all that is just if you limit yourself to economics, which thankfully, we do actually.
VANEK SMITH: Try to limit ourselves to economics, yes. And those events and trends got a lot of headlines as they were happening. And so we started wondering, what are some of the economic trends that really mattered but did not get headlines? Like, which trends are still underrated? And by underrated, we don't mean that these trends were good and people didn't appreciate them, but rather that the importance of the trends has been underrated. One of those trends, in fact, is actually pretty tragic.
GARCIA: Yes, it is. So we have identified what we think are the three most underrated economic trends in the U.S. economy. And we are now going to present them in reverse order. So here we go. No. 3 - people have become more cautious about borrowing and spending money. To explain this one, we need to go back in time a bit.
VANEK SMITH: Last decade, in the middle of the 2000s, Americans were borrowing and spending like crazy. They were especially taking out a lot of mortgage debt. And they were also borrowing against their homes, using home equity lines of credit. But then the housing bubble burst, and it led to a brutal financial crisis and recession. That recession ended in the middle of 2009, just before the end of the decade.
GARCIA: And ever since, people have been saving a lot more of the money they make. To be precise, they are now saving 7.8% of their incomes after taxes, and that is more than twice as much as they were saving before the recession.
VANEK SMITH: Plus, if you look at the overall amount of debt that U.S. households have - so add up mortgages, car loans, credit card debt, student loans - well, as a share of the economy, this debt has actually fallen by a lot this decade. This has been led by an especially big fall in mortgage debt as a share of the economy, which is by far the biggest source of overall household debt.
GARCIA: And this newfound caution of U.S. households has lasted for the entire decade. And it has probably had a couple of effects on the U.S. economy that we have to admit that this next bit is a little bit speculative. So one possible effect is that households are less likely to run into the kinds of problems paying off their debt that could tank the economy, which is what happened last time before the last recession. There are definitely some areas to keep an eye on still like student loan debt, but overall, this caution could mean that the economy is more resilient to a downturn than it was before the financial crisis of 2008.
VANEK SMITH: And the other effect is that the cautious behavior of U.S. households has probably made the economy grow more slowly throughout the decade than if they had been borrowing and spending more money all along. So there has been a tradeoff.
GARCIA: Moving on now to the second most underrated trend of the decade. And this is a sad one, heartbreaking even. It's about life expectancy, which is just how long people expect to live when they are born.
VANEK SMITH: Life expectancy in the U.S. had been climbing for decades, since at least the 1950s, when it was around 69.9 years. But it stopped growing in 2010 and stayed flat for a few years. And since 2014, it's actually been falling from 78.9 years to 78.6 years. That is according to a big new study from the Journal of the American Medical Association.
GARCIA: And that might sound like a small decrease, but still, it is significant that it was falling at all because it means that the kind of progress that many of us had taken for granted has stopped. And it has only stopped in the U.S., not in other countries with advanced economies. The explanation has to do with what scholars refer to as deaths of despair. These are rising deaths from things like suicide, drug overdoses and medical conditions caused by chronic alcohol and tobacco use.
VANEK SMITH: And you might be wondering why we are including this in a list of economic trends of the decade, which is a fair question. Economists and health researchers do not always agree on the extent to which the problem of falling life expectancy is driven by economic conditions versus other things like cultural or psychological factors or problems with the health care system.
GARCIA: But it does seem very likely that economics plays at least some meaningful role here. For example, people without college degrees are more likely to die from these deaths of despair than people with degrees. And that's possibly because they have less access to affordable health care or maybe because these deaths tend to affect people who are more vulnerable to changing economic conditions like a changing labor market.
VANEK SMITH: These deaths are also more concentrated in rural areas and places that have lost a lot of manufacturing jobs. So there is evidence that this is partly a problem of income inequality and geographic inequality. Again, scholars are still debating this, but the dramatic reversal of this trend, this trend of people living longer as time goes on and as the economy matures, was such a big deal that we needed to include it.
So, Cardiff, if this just leaves us with one more trend, the single most underrated trend of the last decade. But first, we're going to take a quick break. And when we come back, we will reveal what it is.
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VANEK SMITH: OK, Cardiff.
VANEK SMITH: Here we are at No. 1, the most underrated trend of the past decade. Ready?
GARCIA: I'm ready.
VANEK SMITH: All right. Well, you know what it is.
GARCIA: I hope our listeners...
GARCIA: Are our listeners ready? Yeah, exactly.
VANEK SMITH: Our top underrated trend of the decade is the spooky consistency of U.S. economic growth. So the economy has been following a weirdly steady path all decade long. But that consistency, you know, it sounds like a pretty positive thing, but it is both a good and a bad thing.
GARCIA: That's right. Yeah, it's good, obviously, because the economy has at least continued growing the entire decade, rather than stumbling back into a recession. But the consistency is bad because the pace of that growth has been very, very slow. And that's especially when you consider how devastating the last recession was. And so a lot of people, a lot of workers and people who want to work have only just recently started benefiting from the economy's recovery, even though it is more than a decade old.
VANEK SMITH: And here are some indicators that demonstrate both sides of the story. The U.S. economy has now been growing for 126 straight months, including this month, which makes it the longest economic expansion ever.
GARCIA: But on the other hand, throughout the expansion, the economy has only been growing at an annual pace of about 2.3% That is the slowest pace of growth for any expansion going all the way back to the 1940s.
VANEK SMITH: Now, take a look at the unemployment rate. The 2010s will be the first full decade in which the unemployment rate has fallen every single year. That's going all the way back to when records were first kept in the late 1940s. And this sounds awesome, right? I mean, falling unemployment means more people getting jobs. This is all good.
GARCIA: It should be awesome, but hold the celebrations because the decline in the unemployment rate has been super gradual. Not until eight years into the economic recovery did the unemployment rate fall back to where it was before the recession. This means that there were a lot of people who could not find work after the recession who have only recently found good, consistent work. And there are other signs of labor market health that did not get back to where they were until just this year. This is a horribly long time to wait.
VANEK SMITH: And you can look at a bunch of charts showing these and other trends. They all kind of look like straight lines. And we'll post the charts at npr.org/money if you want to see more. But the overall impression they give is one of constant but very slow improvement. And this has harmed low income workers the most.
GARCIA: At the same time, Stacey, I got to say, you know, when you think about all that stuff that happened in the past decade, the stuff that we listed when we started the episode...
VANEK SMITH: Yeah.
GARCIA: ...It is kind of amazing that the U.S. economy just kept going right on through it.
VANEK SMITH: It's like the tortoise and the hare, like slow and steady.
GARCIA: Yeah, except, like, it's bad that it was so slow.
VANEK SMITH: Yeah.
GARCIA: But it also could have been worse. It's sort of like a big meh (ph) is I think the way to describe the past decade.
VANEK SMITH: But like more like a meh. Give me like a meh with an exclamation point. Meh.
GARCIA: (Laughter) With an exclamation point. I'm kind of hoping that the upcoming decade can kind of, like, reverse these things where, like, the U.S. economy grows at a really fast, awesome pace, and it helps workers in society's most vulnerable, and everything is calm everywhere else.
VANEK SMITH: Like from meh to yeah.
GARCIA: Yeah, exactly. And also, as economics journalists, like, you and I could use a decade of, you know...
VANEK SMITH: Good news.
GARCIA: (Laughter) Yeah.
VANEK SMITH: We might lose our jobs, but I would - I think it's worth it.
GARCIA: It would be worth it.
VANEK SMITH: This episode of THE INDICATOR was produced by Darius Rafieyan. Our intern is Nadia Lewis. Our editor is Paddy Hirsch. And THE INDICATOR is a production of NPR.
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