The Roaring 2010's

Seven charts that show how the US economy boomed over the last decade

Few of my classmates in the United States would have anticipated the decade to come after we graduated in the spring of 2010: despite a severe recession that had driven unemployment rates to above 10% just the year before, the ten years after we finished school would become one of the strongest periods of economic advancement in US history.

By nearly every measure, the US economy flourished between 2010–2020. Unemployment rates fell each year, reaching a level not seen since 1950. Strong employment helped drive increases in average incomes every year too, the longest sustained period of growth in US history. Consumers found it cheaper to fund a longer term purchase than ever before, thanks to the lowest interest rates in history, while prices for consumer staples increased only slowly.

The strong economy also led to one of the hottest stock markets in history, with the 500 largest publicly traded companies in the US increasing in value from $11T to nearly $26T, a 136% increase over the period. Much of that growth was from the emergence of the American technology giants: Microsoft, Amazon, Apple, Facebook, Google, and Netflix. The US no doubt remained the world leader in innovation.

Surprisingly, the US’s boom was relatively isolated from the other markets around the rest of the world. Stock market crashes in China, economic sanctions on Russia and Iran, schisms between members of the European Union, and political scandals and corruption in South America all led to stronger demand around the world for US exports, ultimately creating a stronger US dollar.

Among the most significant of those exports was the US’s natural gas and oil. For the first time in history, the US became a net-exporter of those fossil fuels, which kept energy prices low and made it much harder for renewables to gain traction, although renewables did marginally increase their market share over the decade.

The stronger energy sector also affected US foreign policy, especially in the Middle East. The last days of the decade featured drone strikes that killed celebrity Iranian and Iraqi generals, causing the most civil unrest in Iran since its revolution in 1979, while Iraq’s congress to vote to expel US troops from the country.

But as I think about the remarkable history from the last decade, I can’t help but worry about the next one. What will happen when the cheap-debt environment, enabled by low interest rates from the Fed, comes to an end? Is the growth that we’ve seen the really sustainable?

Government spending on social security programs must also increase as the baby boomer generation continues to age and retire, leading to either higher tax rates or an increase in government deficits and their associated interest rate payments. Either of those outcomes is likely to slow economic growth in the future.

My biggest concern is that the majority of the benefits of the US’s growth over the decade have gone to those that were already wealthy or high earners. A system where the rich get richer is unsustainable over the long run, and if the system that has underpinned the American economy is radically changed, what will that mean for the world?

But despite those worries, I find it hard not to be optimistic about the potential of the US economy going forward. English continues to be the language of business, science, and politics the world over because of the outsized influence of the US. The US also exports more culture to other parts of the world than ever before, and remains the most desirable destination for professionals all over the world.

While those factors may change slowly over time, I don’t think anyone believes the next decade will feature the year they come undone.

So ultimately I’ll be keeping my money where my mouth is: the vast majority of my assets are still US equities, and I’ll certainly keep buying more over the next decade.