Council of Economic Advisers

In the late 1990s, economists began a debate over what was termed the "Great Moderation," which refers to the reduction in the volatility of a wide range of economic variables, and to the associated increase in the longevity of economic expansions and reduction in the frequency and severity of economic contractions. The debate was not over whether or not there was a Great Moderation-on the heels of the longest economic expansion in American history it was generally agreed that the fact was real, and the relatively mild recession in 2001 only further strengthened the belief. Instead the debate was over what caused it. Was it better monetary or fiscal policy? Or improved inventory management? Or expansions in consumer credit? Or just good luck? The debate over the causes of the Great Moderation ended abruptly with the onset of the Great Recession in late 2007. With the worst economic crisis of our lifetimes still fresh in our minds, it shows little prospect of restarting anytime soon. If anything, the media appears to have become increasingly sensitive to day-to-day fluctuations in the stream of economic data reports. It is easy to remember a lot of the recent volatility, whether it is the S&P 500 rising more than 1 percent after the initial estimate of fourth-quarter GDP growth came in above expectations this past January, or falling 2 percent just a week later, attributed to news of a large drop in the new orders subcomponent of the ISM manufacturing index.

To the Congress of the United States: When I took office, our Nation was in the midst of the worst recession since the Great Depression. The economy was shedding 800,000 jobs a month. The auto industry was on the brink of collapse, and our manufacturing sector was in decline. Many families were struggling to pay their bills and make ends meet. Millions more saw their savings evaporate, even as retirement neared. Seven years later, thanks to the grit and determination of the American people, the United States of America has rebuilt, reformed, and emerged as the strongest, most durable economy in the world. We are in the middle of the longest streak of private-sector job creation in history: 14 million new jobs; the strongest two years of job growth since the '90s; an unemployment rate cut in half. Manufacturing has added 900,000 jobs in the past six years, and our auto industry just had its best year of sales ever. We are less reliant on foreign oil than at any point in the previous four decades. Nearly 18 million people have gained health coverage under the Affordable Care Act, cutting the uninsured rate to a record low. And we've done all this while dramatically cutting our budget deficit. In 2015, we continued to take steps forward, with strong job growth and wages rising at their fastest rate in the recovery. Here in Washington, Congress came together to pass a budget, secure long-term transportation funding, reform education laws, and make tax cuts for working families permanent...........

- Teenagers today live far healthier, more prosperous and promising lives than ever before. Life expectancy for 15-year-olds today is 77 years compared with 62 at the beginning of the century. Such killers as typhoid, cholera, polio, and smallpox now pose only minimal threats to American teens' health. Per capita income has increased eight-fold over the course of the century, and things once considered luxuries such as telephones, televisions, CDs and video games are now staples of teen existence. Girls and minorities now have vastly greater educational and occupational choices open to them than ever before.- Education levels have been improving across the board. Today's teens are taking more courses in core academic subjects and more challenging courses than their counterparts in the 1980s. African-Americans and whites now complete high school at virtually the same high rate: almost 90 percent.- College attendance rates have been increasing over the past decade, but income, race and ethnicity still play a role. Most young people enroll in post-secondary school within 20 months of graduating high school. Women now are enrolled in college in greater numbers than men. However, while 90 percent of children from the richest 25 percent of families pursue post-secondary education, just 60 percent of students from the poorest 25 percent do. And of those going on to post-secondary schools, nearly three quarters of children from the richest families attend four-year colleges, while over half of those from the poorest families attend vocational, technical or 2-year institutions.- School-based teen participation in community service has increased. And community service has been demonstrated to improve academic and social outcomes. One study found, for example, that teens who participated in community service programs had a 75 percent lower rate of school dropout, and a 43 percent lower rate of pregnancy.- Despite increasing prosperity, teens today are at high risk for poor nutrition. According to one recent estimate, only 5.5 percent of American teens are faced with concern over where their next meal will come from. But poor eating habits lead to significant nutrition deficiencies and imbalances among today's teens, with overconsumption of fat and insufficient consumption of fruits and vegetables. Some 60 percent of teen boys and 80 percent of teen girls are calcium deficient. And the rate of obesity has almost doubled in the last 20 years. Between 10 and 15 percent of children and adolescents are obese, placing them at higher risk for diabetes and cardiovascular disease as adults.- While there has been a recent decline in teen homicides and suicides, rates remain high. Guns are the leading cause of fatal teen violence-used in 85 percent of teen homicides and 63 percent of teen suicides. Analysis prepared for this report indicates that in states where fewer homes have guns, there are fewer teen suicides and unintentional gun-related teen deaths. In comparison to the four states with the lowest levels of gun prevalence, the four states with the highest prevalence had twice as many teen suicides and about 10 times as many gun-related accidental deaths.- Teen birth and pregnancy rates are steadily declining. Among teens aged 15-19, the overall birth rate has declined by 18 percent from 1991 to 1998 and have fallen in every state, and across ethnic and racial groups. Nonetheless, rates are still high and remain a serious challenge.- About 4 million young people smoke and the incidence of youth smoking rose during the 1990s. White teens are more likely to smoke than African-American teens. Suburban teens and those with more highly educated parents are more likely to smoke than teens living in cities or rural areas. Research suggests that that the decline in cigarette prices over the early 1990s led to about one third of the increase in smoking among high-school seniors.