America made some memories in 2019. Taylor Swift told us all to calm down, Aunt Becky was accused of cheating to get her daughters into college and a Facebook meme prompted hordes of people — and zero aliens — to trek out to a town near Nevada’s Area 51.
But you might also recall landing a job, getting a raise or wondering whether your favorite socks were going to cost more thanks to President Donald Trump’s trade war with China. If so, we are here for your variety of nostalgia.
Economics is a social science, and these 2019 trends offered insight into the underlying forces that drove the year.
Lost life coaches
Though the job market chugged along in 2019 — businesses added nearly 2 million jobs in the first 11 months, remarkable considering that America was on recession watch throughout much of the year — wage growth moderated. So did a broader measure of employee compensation that includes benefits. And as companies pulled back on perks, it meant fewer life coaches for America’s laboring masses.
Only 14% of surveyed employers offered personal coaching in 2019, according to the Society for Human Resource Management, down from 27% in 2018 and a whopping 46% in 2015. Employer-covered first-class airfare is also slipping.
To be fair, other types of benefits are still on the rise — think lactation rooms and standing desks — and the job market is no monolith. Wages at the lower end of the income distribution are moving up more strongly. But the fact that companies aren’t pulling out all of the stops to attract a broad array of workers even as unemployment lingers at a 50-year low is one major economic mystery of 2019.
Goodbye Queens, hello Queen City
Wage growth may be turning down a notch, but rents in big cities are still steadily climbing. Take New York. Even as Manhattan home prices slumped in 2019, thanks partly to stepped-up taxes on luxury apartments, Zillow data shows that rents accelerated throughout the city and metro area. StreetEasy figures corroborate that.
As rents approach the stratosphere, people are leaving some of the most expensive places, Census Bureau data suggests. Cities like Charlotte, North Carolina — nicknamed the Queen City — and Boston might just emerge as the winners. Search activity for those two places coming from New York is way up, based on data from real estate website Redfin.
The phrase OK Boomer became a rallying cry in 2019, a way to lament the inability of baby boomers to understand — or make room for — people younger than 35. Generational tension also helps to explain why young people are struggling to buy houses. Older owners are staying put and limiting the inventory of would-be starter homes, based on an analysis by the Redfin economist Daryl Fairweather.
Typical American owners had spent 13 years in their house as of 2019, up from just eight in 2010, Fairweather found in an analysis of 55 markets. That keeps older and smaller houses off the market, pushing up prices and locking first-time buyers out.
There was a moment of reprieve in 2019: Home price growth cooled slightly as demand slowed. But then the Federal Reserve cut interest rates in July, September and October, leaving mortgage rates cheaper and bringing demand back. While that is good news for the overall economy, Fairweather expects bidding wars to resume in full force come 2020.
Speaking of the young and relatively broke, capsule wardrobes became a big trend on college campuses. Modern fashionistas are buying a few pieces of staple clothing and rewearing creatively, often inspired by social media influencers. For working professionals, it cuts down on waste and encourages “investment” in pricey pieces. For Gen Z, it means buying fewer clothes, which can save money.
That last point is pretty key, because while bachelor’s degree holders earn way more, student debt burdens continue to mount. America’s outstanding student loan balance topped $1.5 trillion for the first time in the third quarter. For context, that is nearly double the nation’s aggregate credit card debt.
There is some — albeit minor — hope. National data shows that the cost of a four-year college degree is finally slipping, very slightly, after decades of upward march.
“I do” not have the money
One outgrowth of high rents and starter homes, expensive educations and changing social mores? The average age at first wedding was 28 for women and about 30 for men in 2019 — compared with 25 and about 27 in 2000, based on Census Bureau estimates. A Pew Research survey out this year offered a key reason: Couples don’t make enough money.
More than half of cohabitating adults who wanted to marry eventually said that they weren’t walking down the aisle because their partner wasn’t financially ready, according to Pew. A similar share reported being unprepared themselves.
Switching gears a little, 2019 was a big year on the silver screen. But rather than coming up with a “Star Wars” equivalent for the next generation, the entertainment industry in 2019 gave us Baby Yoda, star of the Disney Plus web television series “The Mandalorian” and meme extraordinaire.
It scans like a metaphor for American innovation.
Productivity growth has been stuck throughout the decade, and failed to break out in a lasting way this year. One explanation, championed by Northwestern University economist Robert Gordon, is that prior-century inventions like washing machines transformed the way the world works. Now innovators are left making derivative improvements or less life-altering technologies. Society can’t reinvent running water or the refrigerator any more than Hollywood can outdo the Force.
Faux meat, chicken sandwiches and CBD.
One factor that bodes poorly for productivity going forward? Businesses took a step back from investing as Trump’s trade war and slower global growth stoked uncertainty. Fortunately for the economic numbers, consumers have stepped into the void to power the economy forward, pushing service spending in particular to new heights.
Within that category, households are eating out more. And restaurants have capitalized on robust demand by advertising more variety, whether that meant vegan “meat” offerings, a viral fried chicken sandwich, or CBD-infused food and drink options.
CBD’s less-psychoactive cousin, hemp, had its own trade-war tieback — one that summed up 2019 in a nutshell.
Farmers in southern New Mexico — already struggling as slower immigrant flows and a tight local job market made labor scarce — told Fed interviewers that the local pecan industry had been hurt by the trade war (China is a major consumer). The growers had a plan. “The recent authorization of hemp production provides an opportunity as an alternative to pecan production,” they said, as reported in the Fed’s anecdotal survey in June.
It is a quirky example that underlines a deeper trend. Farm exports took a beating as the trade war ramped up throughout 2019. A recently announced first-phase deal, which is supposed to be signed in early January, could help to ease that pain in 2020.
China may be buying fewer pecans — and tariffs hurt its already-slowing growth this year — but its influence on the global economic stage continues to expand. For evidence, look no further than the video-sharing social network TikTok, a platform for making short videos that was among the most-downloaded applications in Apple’s store this year.
Owned by Chinese tech giant ByteDance, the app may be a signal that social media’s future will look less American as China’s technology sector ascends. But that development may cause turbulence. TikTok’s increasing popularity has raised eyebrows in the United States’ security community.
So there you have it. Tension on the global stage, a strong but confusing labor market and a bunch of unmarried, indebted and CBD-infused millennials look to be 2019’s legacy. Many of those trends are poised to persist into the new decade. Have a happy, and wonky, 2020.