Tag Archives: Economic Growth

Obama Hands Trump Rising Economy: November Continues Record Job Growth, Lowest Unemployment Since 2007

By Karen Rubin, News & Photo Features

With Donald Trump continuing to rewrite history, advance falsehoods about Obama’s Presidency, it is important to examine the Employment report for November. Trumpsters depend upon disaffection and dissatisfaction. A strong economy is the antithesis. Also, Trump wants to take credit as the forward momentum of Obama’s policies continue on into the new administration, before the administration’s policies, undoing everything Obama accomplished, have their impact.

Trump was able to exploit years of propaganda from the Republicans aimed at destroying his presidency. Obama found a way to thread the needle in coming up with solutions, despite unprecedented obstruction of infrastructure spending, the America Jobs Act, spending for transportation and highways, defeating his plans to build high-speed rail and invest in clean, renewable energy.

Obama was almost a victim of his own success – like President Bill Clinton before him, who presided over a golden era of peace and prosperity, when everyone’s income and standard of living rose, only to see Al Gore denied the presidency – people take for granted how much better they are off from when Obama took office, when 850,000 jobs a month were being lost, 20,000 people a month were losing their health care, millions were losing their homes to foreclosure.

Obama also had in place programs to help the people who found themselves unable to pursue the 5.5 million unfilled jobs because of lack of training. He had programs to boost advanced manufacture, and open up markets to the 95% of the world that is outside the US.

Trump is profiting from being handed a growing economy, and he has signaled he will install the very same people who profited from millions of Americans misery, he will undo the financial and consumer protections, he will throw people back into the insecurity of losing health insurance and jobs and homes. He has shown in his appointments and in his business record that he will exploit workers and further weaken unions.

Statement on the Employment Situation in November

WASHINGTON, DC – Jason Furman, Chairman of the Council of Economic Advisers, issued the following statement today on the employment situation in November. 

Summary: The economy added 178,000 jobs in November, extending the longest streak of total job growth on record, as the unemployment rate fell to 4.6 percent.

The economy added a solid 178,000 jobs in November as the longest streak of total job growth on record continued. U.S. businesses have now added 15.6 million jobs since early 2010. The unemployment rate fell to 4.6 percent in November, its lowest level since August 2007, and the broadest measure of underemployment fell for the second month in a row. Average hourly earnings for private employees have increased at an annual rate of 2.7 percent so far in 2016, faster than the pace of inflation. Nevertheless, more work remains to ensure that the benefits of the recovery are broadly shared, including opening new markets to U.S. exports; taking steps to spur competition to benefit consumers, workers, and entrepreneurs; and raising the minimum wage. 

FIVE KEY POINTS ON THE LABOR MARKET IN NOVEMBER 2016 

1. U.S. businesses have now added 15.6 million jobs since private-sector job growth turned positive in early 2010. Today, we learned that private employment rose by 156,000 jobs in November. Total nonfarm employment rose by 178,000 jobs, in line with the monthly average for 2016 so far and substantially higher than the pace of about 80,000 jobs per month that CEA estimates is necessary to maintain a low and stable unemployment rate given the impact of demographic trends on labor force participation. 

In November, the unemployment rate fell to 4.6 percent, its lowest level since August 2007. The labor force participation rate ticked down, though it is largely unchanged over the last three years (see point 3 below). The U-6 rate, the broadest official measure of labor underutilization fell 0.2 percentage point for the second month in a row in part due to a reduction in the number of employees working part-time for economic reasons. (The U-6 rate is the only official measure of underutilization that has not already fallen below its pre-recession average.) So far in 2016, nominal hourly earnings for private-sector workers have increased at an annual rate of 2.7 percent, faster than the pace of inflation (1.6 percent as of October, the most recent data available).

2. New CEA analysis finds that State minimum wage increases since 2013 contributed to substantial wage increases for workers in low-wage jobs, with no discernible impact on employment. In his 2013 State of the Union address, President Obama called on Congress to raise the Federal minimum wage, which has remained at $7.25 an hour since 2009. Even as Congress has failed to act, 18 States and the District of Columbia—along with dozens of local government jurisdictions—have answered the President’s call to action and have raised their minimum wages. (In addition to the States that have already raised their minimum wages, voters in four States approved measures to raise the minimum wage in November.) To assess the impact of minimum wage increases implemented by States in recent years, CEA analyzed data from the payroll survey for workers in the leisure and hospitality industry—a group who tend to earn lower wages than those in other major industry groups and thus are most likely to be affected by changes in the minimum wage. As the chart below shows, hourly earnings grew substantially faster for leisure and hospitality workers in States that raised their minimum wages than in States that did not. By comparing trends in wage growth for the two groups, CEA estimates that increases in the minimum wage led to an increase of roughly 6.6 percent in average wages for these workers. At the same time—consistent with a large body of economic research that has tended to find little or no impact of past minimum wage increases on employment—leisure and hospitality employment followed virtually identical trends in States that did and did not raise their minimum wage since 2013. (See here for more details on CEA’s analysis.)

3. The strengthening labor market is drawing individuals into the labor force, offsetting downward pressure on employment growth from the aging of the population. Employment growth depends on three factors: population growth, the rate at which the population participates in the labor force, and the share of the labor force that is employed. The chart below decomposes employment growth (from the household survey) into contributions from each of these factors for each year of the current recovery. It further decomposes labor force participation into shifts attributable to demographics (such as the aging of the U.S. population) and shifts attributable to other factors (such as the business cycle). Throughout the recovery, demographic changes in labor force participation—primarily driven by a large increase in retirement by baby boomers that began in 2008—have consistently weighed on employment growth. In recent years, however, non-demographic changes in labor force participation have supported employment growth, as the strengthening of the labor market and increasing real wages have drawn more individuals into the labor force. The entry (or reentry) of workers into the labor force has helped employment growth maintain its recent solid pace even as the unemployment rate has fallen more slowly. These two shifts in labor force participation—demographic and non-demographic—have largely offset one another in recent months, and as a result the overall labor force participation rate has remained broadly stable since the end of 2013.

4. The number of unemployed workers per job opening, an indicator of labor market slack, is near its lowest level prior to the recession. Using data from the household survey and the Job Openings and Labor Turnover Survey, the chart below plots the ratio of unemployed workers to total job openings. In the recession, unemployment rose rapidly while job openings plummeted, sending the ratio of unemployed workers to job openings to a record peak of 6.6 in July 2009. As the unemployment rate has decreased over the course of the recovery, and as job openings have climbed to record highs this year, the ratio of unemployed workers to openings has fallen steeply, standing at 1.4 as of September (the most recent data available for openings). This is close to the ratio’s lowest level in the 2000s expansion, another indicator—in addition to recent increases in real wages—of a strengthening labor market.

5. The distribution of job growth across industries in November diverged from the pattern over the past year. Above-average gains relative to the past year were seen in professional and business services (+49,000, excluding temporary help services), while mining and logging (which includes oil extraction) posted a gain (+2,000) for the second time in recent months amid moderation in oil prices. On the other hand, retail trade (-8,000), information services (-10,000), and financial activities (+6,000) all saw weaker-than-average growth. Slow global growth has continued to weigh on the manufacturing sector, which is more export-oriented than other industries and which posted a loss of 4,000 jobs in November. Across the 17 industries shown below, the correlation between the most recent one-month percent change and the average percent change over the last twelve months was -0.06, the lowest level since September 2012.

As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and payroll employment estimates can be subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, and it is informative to consider each report in the context of other data as they become available.

Marking Obama’s Top 10 Actions to Advance Entrepreneurship, Administration Announces New Steps to Build on These Successes

San Francisco, hub of entrepreneurism. President Obama initiatives have encouraged and enabled entrepreneurs, helping the US turnaround from worst recession since the Great Depression, to the U.S. private sector create 15.5 million jobs since early 2010—the longest streak of private-sector job creation on record.  © 2016 Karen Rubin/news-photos-features.com
San Francisco, hub of entrepreneurism. President Obama initiatives have encouraged and enabled entrepreneurs, helping the US turnaround from worst recession since the Great Depression, to the U.S. private sector create 15.5 million jobs since early 2010—the longest streak of private-sector job creation on record. © 2016 Karen Rubin/news-photos-features.com

“[I]t has been the risk-takers, the doers, the makers of thingssome celebrated, but more often men and women obscure in their laborwho have carried us up the long rugged path towards prosperity and freedom.” – President Obama, Inaugural Address, January 21, 2009

In these waning days of Obama’s historic presidency, before the incoming Trump Administration can undo and erase his legacy, it is important to be reminded of his accomplishments:

America’s entrepreneurial economy is the envy of the world.  Young companies account for almost 30 percent of new jobs, and as we have fought back from the worst economic crisis of our lifetimes, startups have helped the U.S. private sector create 15.5 million jobs since early 2010—the longest streak of private-sector job creation on record.

Today, in celebration of National Entrepreneurship Month, the Administration is releasing a Top 10 list of President Obama’s most significant specific actions to promote American entrepreneurship, as well as announcing new efforts to build on these successes.  The President’s unprecedented focus on the role of startups in the United States’ innovation economy is exemplified by his launch of Startup America in 2011, a White House initiative to celebrate, inspire, and accelerate high-growth entrepreneurship throughout the Nation.

Thanks to the grit, determination, and creativity of entrepreneurs all across the country, American startup activity is rebounding and growing more inclusive of historically underrepresented groups and regions.  Studies indicate that:

 

  • Reversing a downward cycle that began during the Great Recession, U.S. startup activity ascended last year, representing the largest year-over-year increase in the last two decades, while measures of startup revenue and employment growth have rebounded across industries as well.
  • New companies created 889,000 jobs in the final quarter of 2015—the highest job creation number since 2008.
  • Rates of entrepreneurship have increased for Latinos, African Americans, and immigrants between 1996 and 2015.
  • Between 2007 and 2016, the number of women-owned firms is estimated to have grown at a rate five times the national average, including a more than doubling of the number of firms owned by African American women and Latinas.
  • American startups are not only rebounding, they are taking root in more communities all across the country—for example, the share of U.S. metro areas that attracted early stage venture capital has increased by around 50 percent since 2009.
  • The number of U.S. startup accelerator programs increased from fewer than 30 in 2009 to over 170 in 2015, providing mentorship and early funding to thousands of startups across 35 states plus D.C. and 54 metro areas.
  • Access to capital for high-growth entrepreneurs has improved significantly since 2009, with venture capital investment up an estimated 200 percent, far exceeding its pre-recession peak, and angel investment up 40 percent, approaching its pre-recession peak.
  • Compared with 137 countries, the United States continues to top the rankings in the Global Entrepreneurship Index, with the world’s most favorable conditions for entrepreneurs to start and scale new companies.

Over the past 8 years, many of the President’s signature achievements have significantly increased opportunities for entrepreneurs to take smart risks and build the next generation of great American companies:  the Affordable Care Act is making it easier for entrepreneurs to buy health insurance, unlocking them from traditional employer-based coverage; the Pay As You Earn program is making it easier for entrepreneurs to pay off student loan debt; the Open Data Initiative has unlocked over 200,000 government datasets as raw material for entrepreneurial innovation;ConnectED and ConnectALL are allowing aspiring entrepreneurs everywhere to access high-speed broadband, while a strong net neutrality policy ensures a free and open internet; and the President signed into law the largest annual increase inresearch and development funding in America’s history.

Breaking down barriers for all entrepreneurs is not the task of just one Administration.  For example, studies suggest that the share of venture-funded startups with women founders has nearly doubled in 5 years—but it is still only 18 percent.  Continuing to reverse America’s 40-year decline in startup activity will require building on the President’s record of addressing income inequality, promoting competitive markets, reducing unduly restrictive occupational licensing, and scaling up rapid training for 21st century technology skills.

In addition to releasing today’s Top 10 list of President Obama’s specific actions to promote entrepreneurship, the Administration is also announcing new private-sector actions to promote inclusive entrepreneurship.

New Actions by Organizations Answering the President’s Call to Action

  • Engineering deans from over 200 universities are committing to building a more-representative student talent pipeline.  At the first-ever White House Demo Day in 2015, 102 engineering deans pledged to develop concrete diversity plans for their programs to tap into diverse talent.  Since then, the American Society for Engineering Education (ASEE) has worked with its members to share best practices and to promote the inclusivity in engineering schools of all students regardless of visible or invisible differences.  ASEE is creating a platform to disseminate best practices among participating engineering schools that will help them implement the diversity initiative.  Today, at 206, the number of engineering deans that have signed the pledge has more than doubled since 2015.  ASEE will continue promoting and enhancing diversity and inclusion through all its participating members.  Read letter HERE.
  • 79 companies have now joined the Tech Inclusion Pledge.  At the Global Entrepreneurship Summit this past summer, President Obama announced a commitment by senior leadership from 33 companies of all sizes to fuel American innovation and economic growth by increasing the diversity of their technology workforce.  Today, 46 additional companies, including Xerox, TaskRabbit, and Techstars, are joining this Tech Inclusion Pledge, committing to take concrete action to make the technology workforce at each of their companies representative of the American people as soon as possible.  To facilitate additional pledge commitments and help companies meet those commitments, the National Center for Women & Information Technology (NCWIT) and CODE2040 commit to maintain a website with free research-based implementation resources.  Read letter HERE. 
  • Early-stage investors are making a new commitment to promote inclusive entrepreneurship.  Today, more than 30 investment firms, angel investor groups, and startup accelerators with over $800 million under management have committed to achieving greater transparency in their funding criteria and to actively mentoring entrepreneurs from underrepresented backgrounds, in an effort to increase the diversity of startup founders in their portfolios.  For example, MassMutual Foundation and Valley Venture Mentors are partnering to create a scalable model for rural startup accelerators, while Pipeline Angels is bringing its training programs for underrepresented investors to 20 additional cities.  Read letter HERE.

The President’s Top 10 Actions to Accelerate American Entrepreneurship

  1. Signed permanent tax incentives for startup investment.  The President signed into law 18 tax breaks for small businesses in his first term, including tax credits for those who hire unemployed workers and veterans.  In addition, in December 2015, Congress responded to the President’s call to make two critical tax incentivespermanent for the first time:
  • Made the Research and Experimentation (R&E) tax credit available to startups.  In addition to making the R&E tax credit permanent for the first time since its enactment in the early 1980s, Congress also expanded the credit to allow pre-revenue startups and small businesses to take advantage of the credit by counting it against up to $250,000 in payroll expenses for up to 5 years.
  • Permanently eliminated capital gains tax on certain small business stock. First enacted on a temporary basis in the Small Business Jobs Act of 2010 and now permanent, this measure eliminates capital gains realized on the sale of certain small business stock held for more than 5 years, providing a major incentive for private-sector investment in high-growth entrepreneurial firms that fuel economic growth.
  1. Accelerated the transition of research discoveries from lab to market.The Federal government invests over $140 billion each year on Federally-funded research and development (R&D) conducted at universities, Federal laboratories, and companies.  The President issued a memorandum to agencies to accelerate the commercialization of Federal R&D, and made these Lab-to-Market efforts a core part of his management agenda.
  • Scaled up I-Corps, a rigorous entrepreneurship training program for scientists and engineers.  The Innovation Corps (I-Corps) program, first launched in 2011 by the National Science Foundation (NSF), provides entrepreneurship training for Federally funded scientists and engineers, pairing them with business mentors for an intensive curriculum focused on discovering a truly demand-driven path from their lab work to a marketable product.  Over the past 5 years, more than 800 researcher teams have completed this I-Corps training, from 192 universities in 44 states, resulting in the creation of over 320 companies that have collectively raised more than $93 million in follow-on funding.  The I-Corps model has been adopted in 11 additional Federal agency partnerships, including an expansion to 17Institutes and Centers at the National Institutes of Health and the Centers for Disease Control and Prevention, and is implemented through a National Innovation Network across more than 70 universities.  Additionally, the Department of Defense’s MD5 National Security Technology Accelerator is helping provide students with the training to apply a similar lean startup methodology to real-world national-security problemssoon expanding to eight institutions of higher education this spring, and including new challenges in diplomacy, urban resilience, and energy.
  • Facilitated personnel exchanges between Federal labs, academia, and industry.  The National Institute of Standards and Technology (NIST) published a final rule on “Technology Innovation-Personnel Exchanges,” allowing Federal agencies to more easily exchange personnel with universities, non-profits, and the private sector to advance R&D commercialization.
  • Increased access to Federally-funded research facilities and intellectual property for entrepreneurs and innovators.  Funded by NIST, the Federal Laboratory Consortium launched online tools for finding specific information and open data on more than 300 Federal laboratories with 2,500 user facilities and specialized equipment, as well as over 20,000 technologies available for licensing.
  • Strengthened Federal R&D funding for startups and small businesses.  For the first time in a decade, in 2011 the President signed a long-term reauthorization of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which annually provide over $2.5 billion in Federal R&D funding to technology startups and small businesses.  The U.S. Small Business Administration (SBA) and 11 participating Federal agencies have expanded access to SBIR/STTR opportunities, including by building theSBIR.gov platform and initiating a road tour that has engaged historically underrepresented communities across the country.
  1. Cut red tape for entrepreneurs.The Administration’s Startup in a Day initiative is cutting red tape to make it easier for more entrepreneurs to get started and grow their businesses.  Over 100 cities, home to nearly 38 million Americans, have taken a public pledge to streamline their business startup processes, allowing entrepreneurs to navigate requirements in as little as 24 hours.  To support these streamlining efforts, the SBA sponsored a prize competition won by 28 cities and communities; examples include the City of Los Angeles and the City of Long Beach, which both created online business portals that are open-source and can be shared with cities and communities across the country.  Additionally, over 52,000 small business borrowers have connected to lenders under a new SBA online matchmaking tool called LINC, while SBA One is taking SBA’s lending process entirely online, which will save hours of time and thousands of dollars per loan for entrepreneurs.
  1. Expanded regional entrepreneurship opportunities.  High-growth entrepreneurship is taking root in more and more communities across the country, in part thanks to targeted investments by this Administration.
  • Seeded startup accelerators in diverse communities.  The SBA’s Growth Accelerator Fund Competition serves entrepreneurs in a broad set of industries and sectors—from manufacturing and tech start-ups, to farming and biotech—with many focused on creating a diverse and inclusive small business community.  From 2014 to now, SBA has funded over 200 startup accelerator programs in every corner of the country, serving well over 5,000 startups that have collectively employed over 20,000 people and raised over 1.5 billion in capital.
  • Pioneered a regional innovation strategy.  SBA’s investments in 62 Regional Innovation Clusters have helped participating small businesses achieve an average employment growth rate of more than five times faster than regional benchmarks, and more than $650 million in Federal contract opportunities.
  • Incentivized regional partners to work together on tech entrepreneurship.  Through its Regional Innovation Strategies (RIS) program and the i6 Challenge, the Department of Commerce’s Economic Development Administration (EDA) has awarded $59 million in capacity-building grants that help entrepreneurs in diverse regions of the country move ideas to market, supporting the creation and expansion of research-commercialization centers and early-stage seed-capital funds.  Earlier this month, EDA announced nearly $15 million in Federal funding plus $18 million in matching funds, reaching urban and rural areas in 19 states, including the first RIS investments that support historically black colleges and universities: a direct investment in Clark Atlanta University’s agriculture and food technology commercialization program; and an investment in a program to increase access to early-stage capital in southeast Louisiana, in which Southern University is a partner.  Among the 35 organizations receiving EDA support are a female-focused early-stage capital fund in Texas, a Native American-focused proof-of-concept program in Oklahoma, and urban innovation hubs focused on fashion technology in Brooklyn and on social innovation in New Orleans.
  1. Directly boosted entrepreneurs’ access to capital.  With only three states attracting the majority of venture capital, the Administration has focused on incentivizing investment in startup communities across the country.
  • Catalyzed investments of $8.4 billion through theState Small Business Credit Initiative (SSBCI).  The SSBCI was created through the Small Business Jobs Act of 2010, which provided $1.5 billion to strengthen state programs that support lending to small businesses and small manufacturers.  Administered by the Treasury Department, SSBCI has catalyzed over $8.4 billion in more than 16,900 new loans and investments all across the country.  To date, business owners report more than 190,000 jobs will be created or retained due to the new loans and investments stimulated by SSBCI funds.  More than half of all SSBCI loans or investments went to young businesses less than 5 years old, and over 40 percent of the loans or investments were in low- or moderate-income communities.  Over 30 states have allocated nearly half-a-billion SSBCI dollars to venture-capital programs—a dramatic increase in funding for the programs that are critical to expanding high-growth entrepreneurship into diverse regions around the country.
  • Strengthened investment fund program for small businesses.  The Small Business Investment Company (SBIC) program, run by the SBA, is a multi-billion dollar investment program to bridge the gap between entrepreneurs’ need for capital and traditional sources of financing.  This Administration has created new pathways for impact investment funds that devote growth capital to companies in underserved communities and emerging sectors, as well as for early-stage innovation funds.  The recently announced Open Network for Board Diversity (ONBOARD) is a public-private initiative working to expand the presence of underrepresented groups on high-growth company advisory boards, boards of directors, and senior leadership, particularly for those supported by SBICs.
  1. Prioritized inclusive entrepreneurship.As part of the first-ever White House Demo Day in August 2015, 40 leading venture-capital firms with more than $100 billion under management committed to advance opportunities for women and underrepresented minorities, and more than a dozen major technology companies committed to new actions to ensure diverse recruitment and hiring.  These actions are complemented by today’s announcements, as well as continued progress by Federal agencies, including:
  • Reduced barriers faced by women entrepreneurs.  SBA created the InnovateHER Business Challenge, where organizations throughout the country hold local competitions for new and innovative products and services to empower women and their families; in 2015, over 1,000 entrepreneurs participated in over 100 competitions, and these numbers doubled in 2016.  Women-owned small businesses reached an important milestone in 2015, meeting the Federal contracting goal for such businesses for the first time in history; overall last year, the Federal government awarded an all-time high of 25.75 percent of government contracts to all small businesses, supporting 537,000 American jobs.
  • Unlocked the potential of Federal inventions with entrepreneurs from all backgrounds.  The National Institute of Standards and Technology, the Minority Business Development Agency, and the Federal Laboratory Consortium partnered together to launch the Inclusive Innovation Initiative (I-3), designed to increase minority business participation in Federal technology transfer.
  • Trained veteran entrepreneurs for 21st century opportunities.  The Department of Veterans Affairs Center for Innovation is helping to expand the 3D Veterans Bootcamp, a program that provides Veterans with technical training in 3D printing and design skills to accelerate designs to market.  The training will annually prepare over 400 Veterans and transitioning service members for careers in advanced manufacturing and will provide guidance and resources for those wishing to launch their own business.  Additionally, SBA launched Boots to Business, an entrepreneurship education program that provides transitioning service members with introductory business training and technical assistance.  Since 2013, over 20,000 transitioning service members, including many spouses, participated in the Boots to Business introductory class on over 165 military installations worldwide.
  • Launched TechHire to train people for entrepreneurial opportunities and well-paying jobs.  In 2015 the President launched TechHire, a multisector effort to empower more people from all backgrounds with the skills they need, through universities and community colleges but also innovative nontraditional approaches like “coding bootcamps,” that can rapidly train workers for technology jobs.  Since then, 50 communities in partnership with over 1,000 employers have initiated local efforts that have placed over 2,000 people into tech jobs and entrepreneurial opportunities.
  • Expanded entrepreneurial opportunities for the unemployed and underserved. The Department of Labor (DOL) has funded the expansion of voluntary state-run Self-Employment Assistance (SEA) programs, designed to encourage and enable unemployed workers to create their own jobs by starting their own businesses while receiving unemployment insurance benefits; helped make entrepreneurial training available to more than 200,000 low-income and out-of-school youth with barriers to employment; and helped make it easier for formerly incarcerated persons to participate in the SBA’s microloan program.
  1. Created opportunities for promising entrepreneurs and innovators from abroad. While there is no substitute for Congress passing commonsense immigration reform, the Administration is taking the steps it can to fix as much of the broken U.S. immigration system as possible.  Many of these commonsense steps are designed to attract and retain the most talented workers, graduates, and entrepreneurs from around the world.
  • Released a rule tailored for international entrepreneurs. The Department of Homeland Security (DHS) published a proposed International Entrepreneur Rule, which describes new ways in which DHS will make it possible for certain promising startup founders to grow their companies within the United States.  Once this rule is finalized, it will provide much-needed clarity for entrepreneurs who have been validated by experienced American funders, and who demonstrate substantial potential for rapid growth and job creation—benefiting American workers and the U.S. economy.
  • Acted to retain more of the scientists and engineers educated in the United States.  American universities train some of the world’s most talented students in science, technology engineering, and mathematics (STEM), but the broken U.S. immigration system compels many of them to take their skills back to their home countries.  DHS published a final rule on STEM Optional Practical Training allowing international students with qualifying STEM degrees from U.S. universities to extend the time they participate in practical training, while at the same time strengthening oversight and adding new features to the program.
  • Unlocked the talents of high-skilled Americans-in-waiting.  The Administration is making it possible for high-skilled workers on temporary visas to accept promotions, change positions or employers, or start new companies while they and their families wait to receive their green cards, and ultimately become Americans, by the publication of a policy memo on job portability and a final rule improving employment-based visa programs.  In addition, DHS published a new rule that has allowed the spouses of certain high-skilled immigrants to put their own education and talents to work and contribute to the American economy.
  1. Updated securities laws for high-growth companies.Thanks to the bipartisanJumpstart Our Business Startups (JOBS) Act signed by the President in 2012, entrepreneurs have greater access to capital from the seed stage all the way to an initial public offering (IPO).  These new capital-formation pathways include:
  • The “IPO on-ramp” makes it easier for qualifying smaller firms to responsibly access public markets.  Thanks in part to the JOBS Act, which phases in regulatory requirements for smaller companies making an initial public offering (IPO), in the year ending in March 2014 smaller IPOs were at their highest level since 2000; one study estimated that the JOBS Act was responsible for a 25 percent increase in IPO activity, including among biotech startups.
  • Entrepreneurs can raise up to $50 million through regulated “mini public offerings.”  Through the “Regulation A+” provision of the JOBS Act, the U.S. Securities and Exchange Commission (SEC) has qualified around 50 companies to make streamlined public offerings of over $840 million in aggregate—whereas the previous version of this rule was rarely used.
  • Entrepreneurs can raise up to $1 million from regular investors through a new class of regulated crowdfunding platforms.  A new, national, SEC-regulated marketplace for securities-based crowdfunding first opened for business 6 months ago; by one measure, these new crowdfunding platforms have allowed startups and small businesses to raise $12 million from over 15,000 regular investors. 
  1. Made the U.S. patent system more efficient and responsive to innovators.The President signed the Leahy-Smith America Invents Act in September 2011, giving the U.S. Patent and Trademark Office (USPTO) new resources to significantly reduce patent application wait times.  Total processing times for both patents and trademarks have been reduced by approximately 25 percent and 14 percent, respectively, since 2009.  This reduction has come with both a 50-75 percent reduced cost for startups and small businesses, as well as the creation of a fast track program where applicants can get a final disposition in about 12 months.  In addition, with a series of executive actions, the Administration has taken steps to increase transparency to the patent system and level the playing field for innovators, and leveraged the knowledge of the American people by crowdsourcing information about prior art.  USPTO has also launched an International IP Toolkit to empowerinnovators with tools to facilitate exports and empower global expansions, a Patent Pro Bono Program across all 50 states to provide free legal assistance for inventors who file patent applications without the assistance of a patent attorney, and a fast-track review for patents related to cancer treatment as part of Vice President Biden’s Cancer Moonshot.
  1. Unleashed entrepreneurship in the industries of the future.  The President has long recognized that it is entrepreneurs in clean energy, medicine, advanced manufacturing, information technology, and other innovative fields who will build the new industries of the 21st century, and solve some of our toughest global challenges.
  • Encouraged private-sector investment in clean-energy innovation.  The Administration has created and promoted new opportunities for clean-energy entrepreneurship, including support for student startups through business plan competitionsvouchers for services available to small businesses at National Laboratories; embedded entrepreneurial training within the National Laboratories; technical assistance and pilot testing at regionally-focused incubators and establishment of a national incubator network to support entrepreneurs and small businesses; and awards through the SunShot Incubator for startups driving down the cost of solar energy.  These opportunities have doubled the number of partnership agreements between small businesses and National Laboratories, and supported hundreds of startups that have attracted well over $3 billion in follow-on funding.
  • Boosted innovation and entrepreneurship in the bioeconomy.  In 2012, theAdministration released the first-ever National Bioeconomy Blueprint, to outline a series of steps to grow and manage a sector that is generating annual revenues greater than $300 billion and that is contributing the equivalent of at least 5 percent of annual U.S. GDP growth.  In 2015, recognizing that navigating the regulatory process for biotechnology products can be unduly challenging, especially for small companies, the Administration initiated an effort to improve transparency and predictability in the regulatory system for biotechnology products.
  • Spurred innovation and entrepreneurship in the commercial space industry. Working with NASA, American companies have developed new spacecraft that are cost-effectively delivering cargo to the International Space Station and are working towards ferrying astronauts there by the end of 2017.  U.S. companies that got their start supporting government missions have increased their share of the global commercial launch market from zero in 2011 to 36 percent in 2015.  Federal agencies are also leveraging innovative procurement methods and creating a supportive regulatory environment to allow space entrepreneurs to pursue ventures in areas such as remote sensing, satellite servicing, asteroid mining, and small satellites.  More venture capital was invested in America’s space industry in 2015 than in all the previous 15 years combined.
  • Grew innovation ecosystems for nanotechnology and advanced materials.  The National Nanotechnology Initiative has invested over $150 million per year in user facilities at Federal laboratories and universities that provide entrepreneurs low- or no-cost access to state-of-the-art instrumentation; cumulatively funded more than $700 million of nanotechnology-related research by small businesses; and catalyzed the creation of a Nano and Emerging Technology Student Network and annual conference with a specific goal of promoting entrepreneurship.  The Materials Genome Initiative, launched in 2011 to reduce the time and cost required to discover, manufacture, and deploy advanced materials, has opened up an array of new data and infrastructure resources to entrepreneurs, including an expanding set of open-access databases to mine the properties of hundreds of thousands of materials.
  • Enabled a new generation of aviation technology for commercial use.  Powering a revolution in unmanned flight, this summer the Administration announcedground rules to govern commercial, scientific, public safety and other non-recreational uses of unmanned aircraft systems (UAS)—commonly known as “drones.”  These rules are enabling the safe expansion of a new generation of aviation technologies and startups that will create jobs, enhance public safety, and advance scientific inquiry. Industry estimates suggest that, over the next 10 years, commercial unmanned aircraft systems could generate more than $82 billion for the U.S. economy and by 2025, the industry could be supporting as many as 100,000 new jobs.
  • Supported the growth of advanced robotics.  In 2011, President Obama announced the National Robotics Initiative (NRI) — a multi-agency collaboration to accelerate the development of next-generation robots that can solve problems in areas of national priority, including manufacturing, sustainable agriculture, space and undersea exploration, health, transportation, personal and homeland security, and disaster resiliency and sustainable infrastructure.  The NRI has invested over $135 million in 230 projects in 33 states, fueling the development of new technologies and business opportunities, including robots that can inspect bridgesmonitor water quality, and even aid in future space missions.
  • Supported manufacturing entrepreneurship through a national network of R&D hubs. Manufacturing USA brings together industry, academia, and government to co-invest in the development of world-leading manufacturing technologies and capabilities.  In the 4 years since its establishment, Manufacturing USA has grown to a network of nine institutes and over 1,300 members—of which more than one-third are small- and medium-sized enterprises.  These public-private partnerships are catalyzing entrepreneurial activity by, for example, working with regional Manufacturing Extension Partnership Centers to help small manufacturers across the nation adopt advanced manufacturing techniques; and blending manufacturing technology and entrepreneurship in project-based learning programs for high schoolers.
  • Stimulated entrepreneurial solutions through increased use of incentive prizes.  Since 2010, more than 100 Federal agencies have engaged 250,000 Americans through more than 700 incentive prizes on Challenge.gov to address tough problems ranging from fighting Ebola, to improving speech recognition, to blocking illegal robocalls. Competitions such as the NIH Breast Cancer Startup Challenge and many more have made over $220 million available to entrepreneurs and innovators and have led to the formation of over 300 startup companies with over $70 million in follow-on funding.
  • Fostered grassroots innovation through the maker movement.  Beginning with the White House Maker Faire in June 2014 and continuing with a National Week of Making in both 2015 and 2016, the Administration has supported a growing grassroots community of makers—Americans using new tools, technologies, and spaces to design, build, and manufacture.  Federal agencies, companies, non-profits, cities, and schools collectively committed to creating over 2,500 maker-oriented spaces in the United States to expand access for both students and entrepreneurs.  Earlier this month, more than 300 organizations from all 50 states, with industry support including Chevron, Cognizant, and Google, came together to launch an independent nonprofit called Nation of Makers, to provide an ongoing community of practice and leadership to the maker movement.

President Obama has also elevated innovation and entrepreneurship as a foreign policy priority beyond America’s borders.  Following his historic 2009 Cairo speech, the President hosted the first Global Entrepreneurship Summit (GES) at the White House in 2010; since then, annual GES events worldwide have provided over 7,000 emerging entrepreneurs with networking and investment opportunities and catalyzed over $1 billion in private-sector commitments.  The U.S. Agency for International Development (USAID) Partnering to Accelerate Entrepreneurship (PACE) initiative catalyzes private-sector investment and identifies innovative models that help global entrepreneurs bridge the “pioneer gap.”  Working in partnership with more than 40 incubators, accelerators, and seed-stage impact investors worldwide, USAID’s U.S. Global Development Lab creates public-private partnerships dedicated to testing ways to foster entrepreneurship, which are expected to leverage $100 million in combined public and private investments. The Presidential Ambassadors for Global Entrepreneurship (PAGE) initiative is a collaboration among American entrepreneurs, the White House, the Department of Commerce, and other Federal agencies to harness the creativity of U.S. business leaders to help develop the next generation of entrepreneurs both at home and abroad.  The Department of State’s Global Innovation through Science and Technology (GIST) program has engaged with science and technology innovators and entrepreneurs in 135 emerging economies around the world, providing training and resources to help them build successful startups.

For additional information and progress updates on organizations answering the President’s Call to Action to Advance Entrepreneurship, click HERE.

Real GDP Grows 2.9% in 3rd Quarter, Exports up 10%, Consumer Spending Strong

Unfortunately for Donald Trump, whose candidacy depends upon economic suffering, the US economy continues to grow, in fact, Real GDP grew 2.9% in the third quarter, and exports grew at 10%, the fastest quarterly pace since 2013, while consumer spending continued to grow at a solid pace.

But with the disinformation campaign intact,  which the Trump campaign sees as the only way to an increasingly elusive victory, Dan Kowalski, Trump’s Deputy Policy Director,  stated, “America can do better than the modest growth of 2.9 percent recorded for the 3rd quarter and the dismal growth of 1.5 percent for the past year. Growth hasn’t risen above 3 percent for a full year in any year of the Obama presidency. Decades of strong economic growth and global leadership have been replaced with low-paying jobs, global chaos and a national debt that has doubled under Obama-Clinton.

“The single most important issue facing the American people is an economy that has failed to deliver jobs, incomes, and opportunity. The Trump economic plan creates at least 25 million jobs and 4 percent growth through tax, trade, energy and regulatory reforms.” 

In contrast, Hillary for America Senior Policy Advisor Jacob Leibenluft stated: “Today’s GDP release shows economic growth at its fastest pace in two years. With more than 15 million jobs created since early 2010 and real median incomes growing more than 5 percent last year, it’s clear we’ve made real progress coming back from the crisis. But Hillary Clinton believes there is still more we need to do to build an economy that works for everyone, not just those at the top. Independent experts agree her plan would create good-paying jobs through investments in infrastructure, innovation and education. Donald Trump, on the other hand, would take us backwards, with experts across the political spectrum warning his plans would risk another recession and cost jobs.”

 

Jason Furman, Chairman of the Council of Economic Advisers, issued the following statement today on the advance estimate of GDP for the third quarter of 2016. You can view the statement HERE.

Summary: Real GDP grew 2.9 percent at an annual rate in the third quarter, with strong export growth and continued strength in consumer spending.

The economy grew 2.9 percent at an annual rate in the third quarter of 2016, a noticeably faster pace than in the first half of the year. Exports, which have faced significant headwinds in recent years from slow growth abroad, grew at an annual rate of 10.0 percent in the third quarter, their fastest quarterly pace since 2013. Consumer spending continued to grow at a solid pace in the third quarter, while inventory investment (one of the most volatile components of GDP) boosted GDP growth after subtracting from it in the prior five quarters. In contrast to the pattern of recent quarters, business fixed investment also contributed positively to GDP growth, though it continues to be restrained by slower global growth. But more work remains to strengthen economic growth and ensure that it is broadly shared, and the President will continue to take steps to promote greater competition across the economy, including in the labor market; support innovation; and call on Congress to increase investments in infrastructure and to pass the high-standards Trans-Pacific Partnership.

FIVE KEY POINTS IN TODAY’S REPORT FROM THE BUREAU OF ECONOMIC ANALYSIS (BEA)

  1. Real Gross Domestic Product (GDP) increased 2.9 percent at an annual rate in the third quarter of 2016, according to BEA’s advance estimate. Consumer spending grew 2.1 percent in the third quarter following its strong second-quarter growth of 4.3 percent, with continued solid growth in durable goods spending and a contraction in nondurable goods spending. Inventory investment—one of the most volatile components of GDP—added 0.6 percentage point to GDP growth in the third quarter after subtracting 1.2 percentage point in the second quarter. Nonresidential fixed investment contributed positively to GDP growth for the second quarter in a row, due in large part to a pickup in structures investment growth (see point 4 below). Residential investment declined for the second quarter in a row, albeit at a slower pace in the third quarter than in the second quarter. Notably, exports grew 10.0 percent at an annual rate in the third quarter, its fastest quarterly growth since late 2013, despite continued headwinds from slow growth abroad (see point 3 below).

 Chart1

  1. The pace of third-quarter real GDP growth was noticeably faster than its pace in the first half of 2016. Real GDP growth averaged 1.1 percent at an annual rate in the first half of 2016. The pickup in growth in the third quarter can be attributed largely to two components of GDP: inventory investment and exports. In the first half of the year, these components contributed -0.8 percentage point and 0.1 percentage point, respectively, to overall real GDP growth. Both components saw substantial pickups in growth in the third quarter relative to the first half of the year: inventory investment contributed 0.6 percentage point to GDP growth, while exports contributed 1.2 percentage point, their second-largest quarterly contribution to growth since 2010. Other components of GDP, including both structures and equipment investment and government purchases, also saw faster growth or smaller contractions in the third quarter. These were partly offset by smaller positive contributions from consumer spending and intellectual property products investment and a larger negative contribution from residential investment.

Chart2

  1. Real exports grew 10.0 percent in the third quarter, their fastest quarterly growth since 2013. In recent years, slowing global demand has been a key headwind to U.S. growth, as the volume of U.S. exports to foreign countries is sensitive to GDP growth abroad. In its October World Economic Outlook, the International Monetary Fund (IMF) revised down its forecast of global growth for the four quarters of 2016, removing an expected pickup in growth from 2015 to 2016. The IMF currently forecasts global growth to pick up in 2017, suggesting less downward pressure on export growth going forward. Nevertheless, real export growth in the third quarter was substantially faster than in recent quarters, due in part to a large increase in agricultural exports. (As shown in the chart below, real export growth had slowed even faster in recent quarters than the slowdown in world growth would have implied, potentially explaining some of the bounce-back in the third quarter.) The sensitivity of U.S. exports to foreign demand and the large contribution of exports to overall growth in the third quarter underscore both the importance of opening foreign markets to U.S. exports by passing the high-standards Trans-Pacific Partnership and the agreement’s potential to strengthen the U.S. economy as a whole.

 Chart3

  1. As oil prices have risen slightly in recent months, contractions in oil-related investment have weighed somewhat less on overall growth. The price of Brent crude oil was $31 per barrel in January 2016, nearly three-quarters lower than its recent peak in June 2014. While the decline in oil prices has benefitted consumers and the economy overall, it has weighed heavily on both mining and logging employment and on investment in mining exploration, shafts, and wells—which includes petroleum drilling structures—which declined by nearly two-thirds from the fourth quarter of 2014 through the second quarter of 2016. Partly as a result, overall structures investment subtracted an average of 0.2 percentage point from quarterly real GDP growth over this period. From its trough in January, however, the monthly price of Brent crude oil increased to $47 per barrel as of September, and the number of oil and natural gas rigs in operation (which reflects the rate of drilling for new oil and natural gas) has risen for five consecutive months. Consistent with the increase in oil prices, investment in mining exploration, shafts, and wells contracted more slowly in the third quarter of 2016 than in earlier quarters, and overall structures investment added 0.1 percentage point to GDP growth. Since both oil-related investment and employment tend to lag prices by several months, the recent moderation in oil prices may translate into a slowdown in the pace of employment losses and further slowing in the rate of contraction in mining exploration, shafts, and wells investment in future quarters.

 Chart4

  1. Real private domestic final purchases (PDFP)—the sum of consumption and fixed investment—rose 1.6 percent at an annual rate in the third quarter, a somewhat slower pace than in recent quarters. PDFP—which excludes more volatile components of GDP like net exports and inventory investment, as well as government spending—is generally a more reliable indicator of next-quarter GDP growth than current GDP. In the third quarter, the divergence between overall real GDP growth and the relatively weaker contribution of PDFP to growth was largely accounted for by the large positive contributions of inventory investment and exports to real GDP growth. Overall, PDFP rose 1.9 percent over the past four quarters, above the pace of GDP growth over the same period.

Chart5

As the Administration stresses every quarter, GDP figures can be volatile and are subject to substantial revision. Therefore, it is important not to read too much into any single report, and it is informative to consider each report in the context of other data as they become available.