In many ways, the economy is better going into 2015 than it was a year ago, but in many others, the trend lines are troubling at best.
The December unemployment report highlighted both the ups and the downs. The unemployment rate was down to 5.6 percent — a level that has never been considered good, but certainly better than the 6.6 percent rate of a year before.
Over the course of the year, just fewer than 2.8 million more people became employed, an average of 230,000 a month. However, this upswing has slowed the past two months, with employment gains down to a paltry average of 81,000 a month in November and December, hardly the portent of a coming hiring boom.
The labor participation rate is at lows not seen since Jimmy Carter was president in the late 1970s, and 1.2 million more Americans 16 years and older are out of the workforce than just a year before, contributing to the lowered unemployment rate. The December survey showed that the 456,000 people who dropped out of the workforce were all women, a strange anomaly that one hopes doesn't mean we are returning to the 1970s, when two-income households were far more rare than today. Additionally, over the course of the past year, the drop in participation has been across the age spectrum — while those aged 55 and over have led the way (retirements, etc.), workforce participation has also fallen in the other age categories, which is bad news.
Wages for workers dropped in December, lowering the overall wage gains for the year to a paltry 1.7 percent, barely ahead of the inflation rate.
This uncomfortable truth — that American workers are fighting to tread water financially — is the ignored reality for most in Washington, and it is the economic well-being of those who draw a paycheck that underlies the continuing national unease five years into "recovery."
One extremely bright spot has been the decline in energy prices over the course of the past six months. According to AAA, a year ago the average cost for a gallon of gasoline was $3.315, while today it is $2.139. This drop means that cumulatively, Americans saved $14 billion on gasoline prices last year.
While the current price levels are economically unsustainable, gasoline is a commodity that virtually every American needs, and those who are economically disadvantaged and drive older vehicles that get lower gas mileage are direct beneficiaries of this economic boon.
While drivers of $100,000 electric Teslas might not care, the person who gasses up once a week to commute to work and is paying $30 rather than $50 for that gas has received the equivalent of a free-market tax cut with all the residual economic value that entails.
But never fear, there are some Senate Republicans who worry that the 147 million people who work for a living might be getting a break, and want to impose higher gas prices to cover shortfalls in the transportation trust fund.
Beyond the obvious political stupidity, raising gasoline prices makes no sense economically. Consumer spending drives two-thirds of the gross domestic product, and politicians have been handed a private-sector lower energy prices stimulus gift that may finally lift the overall economy out of the doldrums.
If only D.C. can just resist the urge to mess it up.
Manning (@rmanning957) is vice president of public policy and communications for Americans for Limited Government