Over the past five years, several concerning trends have played out in the U.S. economy. In this clip from "Ask Us Anything" on Motley Fool Live, recorded on April 22, Fool.com contributor Jon Quast discusses several of the contributing factors that have put the American economy in a dangerous position.
10 stocks we like better than Walmart
When our award-winning analyst team has an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Stock Advisor returns as of 2/14/21
Jon Quast: I was reading this morning an article from The Atlantic by author Derek Thompson and what's interesting when you think about why does the stock market go up over long periods of time? It's because the economy grows over long periods of time. Why does the economy grow? Because there's more people in the economy. Just at a very high level. How do you get more people in the U.S. economy? Well, you have more births and you have deaths and you also have immigration.
Over the past several years, there's been several trends playing out. One, we do have an aging population in the U.S., so deaths are going up. We're also having less kids than we have in past decades so births are down, but we also have an immigration decline.
From 2016 to 2021, according to this article from The Atlantic, net immigration down 75%. This isn't, we're not talking about illegal, legal, all this stuff. We're talking about everything here so that includes legal immigration is also very much on the decline. Basically, our population growth stagnated last year. I think that we only added something in the order of 200,000 people in the U.S. for the year. That is extremely low historically.
Thompson writes "simply put, the U.S. has too few births, too many deaths and not enough immigrants, whether, by accident, design or total misunderstanding of basic economics, America has steered itself into the economic danger zone."
It is very interesting, especially when you think about how hot the economy has been since 2014 through the start of the pandemic. The economy is just growing by leaps and bounds, but you don't have the population to go with that. You do have these job openings up because, hey, businesses are doing so well we need more people, we need to hire some more people, and there's fewer and fewer people to hire. It's an interesting dynamic.