Americans’ relative spending power increases as the U.S. dollar strengthens

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U.S. dollar strength

The U.S. dollar has been strengthening since early 2016, making American goods cheaper for foreign buyers. As a result, Americans have become less competitive in international markets. In fact, the United States now spends about 2% less than its competitors on average.

Declining labor costs

Labor costs have declined over the past decade, especially in manufacturing. This means that companies can produce products at lower prices without having to raise their wages.

Rising housing prices

Housing prices have increased dramatically in recent years. While this is good news for homeowners, it makes buying homes more expensive for consumers.

Falling oil prices

Oil prices have fallen significantly over the last few years. This has helped reduce the cost of transportation, heating, and electricity.

Rising interest rates

Interest rates have risen steadily since 2008. Higher rates make borrowing money more expensive for consumers and businesses.

Lower inflation

Inflation has decreased over the past several decades. This is great news for consumers who want to buy items that they need but don’t necessarily want to spend a lot of money on them.

Increased productivity

Productivity has increased over the past several decades, meaning that workers can do more work with fewer people.