5 economy trends to be thankful for

1. A (mostly) painless disinflation. The idea that it would require a recession, or at least major economic "pain," to bring inflation back to normal looks wrong so far.

• Policymakers might have underestimated how much the supply side of the economy would assist in the inflation fight. The economy has not buckled under the weight of high interest rates.
• When we sent our economic gratitude list last year, the Consumer Price Index — excluding food and energy costs — was 4%. This year: 3.3%, all while the economy keeps expanding at an above-trend pace.
• The average Thanksgiving meal is cheaper relative to last year. Those driving to visit family and loved ones will pay a bit less to fill up their tank.
• The stock market, meanwhile, continues to roar on the back of AI excitement (more on that below): The S&P 500 is up more than 25% since the start of 2024.

2. Real wages are rising. Wages might still lag price gains over the longer-term horizon (it depends on the exact time horizon you use, and which measurements of both inflation and compensation). But the good news is that they are moving in the right direction.

• Average hourly earnings for rank-and-file workers is up about 9% over the past two years — beating the roughly 6% increase in prices in that period.
• Unionized workers, meanwhile, are winning the big pay increases that other workers received a few years back.
• Central bankers see the current pace of wage gains as sustainable for the economy, with little concern that the labor market is stoking inflation.

3. Companies aren't firing many people. The job market has clearly softened over the last year, but what hasn't changed is very low rates of discharges and layoffs. Companies that are worried about the outlook are responding in a different way than in previous economic cycles.

• Instead of shedding workforces, businesses have pulled back on hiring. Finding a new job is tough, but employees generally can collect paychecks through this holding pattern.
• As of September, the rate of layoffs remained low at 1.2% — in line with that seen before the pandemic. The number of people filing jobless claims has remained at rock-bottom levels.
• Roughly 81% of American adults were employed as of last month, matching the peak rate seen during the decade-long economic cycle that preceded the pandemic.

4. The pace of technological innovation for products like AI and the recent jump in productivity makes America the envy of the world.

• The U.S. economy rebounded from the pandemic shock faster and stronger than any other rich nation. Over the long term, that economic outperformance might continue if AI is as transformative as economists expect.

• In a note this week, analysts at BlackRock said AI investment could rival that seen during the industrial revolution and the technology "could radically shape economies and markets."
• A report this year by European statesman Mario Draghi said, in short, that the continent needs to be more like the U.S. — and fix its "weak innovation" in AI — to jumpstart growth and productivity.

5. Entrepreneurship is thriving. The pandemic unleashed a startup boom as Americans started businesses at a historic rate.

• In October, there were more than 146,000 business applications — below the peak seen in 2020 but still far more than at any point before the pandemic.
• It could be a sign of more job growth and more innovation that helps drive economic growth.

The bottom line: This is not a declaration that the economy is without flaws. But with all of its imperfections — and looming risks ahead — there is quite a lot to be thankful for.