Cheaper gas and thriving labor: 5 economic trends we're grateful for

1. Americans are working. If you believed workers wouldn't return to the labor force, the last year has proved you wrong.

• Workers have joined the job market in droves. The rebound in supply, lifted in part by an immigration surge, has helped the labor market come into better balance amid continued low unemployment.
• The share of workers aged 25-54 who were employed was 80.6% in October — down slightly from a multi-decade high reached over the summer but higher than was seen in any month between June 2001 and January 2020.
• For women aged between 25 and 54, the share who are in the labor force is near its highest level ever. So much for pandemic-era fears of a prolonged "she-cession."

2. Real wages are rising. No matter your preferred wage growth measure, the data tells a similar story. While pay isn't rising quite as fast as 2022's breakneck pace, inflation has cooled much faster.

• That means wages finally began to outpace inflation this year after a miserable stretch when many Americans saw their paychecks shrink in real terms.
• Average hourly earnings for rank-and-file employees are up 4.4% over the last year, compared to 3.2% inflation. That may be helping keep the bedrock of the U.S. economy — consumer spending — healthy.

3. Productivity is surging. Americans are producing more goods and services for every hour of labor. Maybe it's a statistical anomaly (short-term productivity swings often are). But it may reflect some good things happening in the economy's inner workings.

• Pandemic-caused supply disruptions are receding. Employers have had time to onboard and train all the workers they added to payrolls in 2021 and 2022, with the workforce reallocating toward higher-value work.
• Maybe, just maybe, the artificial intelligence revolution is already starting to pay some productivity dividends.
• If it continues, that would allow the economy to grow while inflation continues falling — no recession needed.

4. The banking crisis that wasn't. Eight months ago, the collapse of Silicon Valley Bank and two other large regional banks looked like the start of a banking crisis that risked choking off lending economy-wide. It hasn't happened.

• There have been no further major bank failures, and credit availability has generally remained stable.
• The government's decision to use emergency authorities to make even the largest depositors in SVB whole instilled confidence in the banking system and prevented both mass outflow of deposits and large-scale contraction of bank lending.

• If you are an enthusiast of the Fed's H.8 report (Assets and Liabilities of Commercial Banks in the United States, as it is known) — and who isn't — you will see that banks' aggregate real estate loans, consumer loans and most other forms of lending are higher now than a year ago.
• Commercial and industrial loans are down only very slightly, to $2.775 trillion in October from $2.777 trillion a year earlier.

5. Gas is getting cheaper. The average gallon of gasoline was $3.29 last week, down from a record high of $5 in June 2022 and $3.87 as recently as August.

• That number looks better when you look at it against the backdrop of rising nominal wages. One hour of labor at the U.S. average hourly earnings for private-sector workers bought you 9.4 gallons of gasoline in October, similar to levels seen in 2018. An hour of work bought you only 6.5 gallons of gas in June 2022.
• Gas prices could fall further still: Oil prices are dropping, declines that may feed through to cheaper prices at the pump.

The bottom line: The U.S. economy isn't perfect. We'll continue to cover the very real challenges facing consumers and businesses for the remainder of this year and into 2024.

• Still, there are real, impressive things to look at and be thankful for.