Declining fertility rates have been in the news a lot lately, and with good reason. Some countries, such as South Korea, have seen massive declines in fertility rates, and they face huge social problems and population decline resulting from these declining rates. But does the United States face the same problem?
To be clear, fertility rates are down in the US. Using the most common measure, the total fertility rate, births per woman in the US fell from a peak of over 3.5 births at the peak of the Baby Boom in the late 1950s and early 1960s, to around 2 births per woman in the 1990s and 2000s, and fell further to 1.6 births in 2023 (note: it had been around 2 births in the 1930s as well — the Baby Boom was a very real).
But the total fertility rate, or the number of births per woman of child-bearing age (usually 15-49) in a particular year is not a perfect measure. As Saloni Dattani clearly explains, if the timing of births is changing, this can make the TFR temporarily fluctuate. If women on average are delaying births to a later age, the TFR will fall initially even if women end up having the exact same number of children.
An alternative measure suggested by Dattani is the completed cohort fertility rate. This measure looks at the total number of children that women from a particular birth year in a country have throughout their child-bearing years. This rate also shows a decline for the US, but it is much more gradual: for women born in the 1930s (who would eventually become mothers during the Baby Boom), they peaked at about 3.25 births per woman, which declined to right at about 2.0 births in the 1950s (the Baby Boomers themselves), and has gradually risen since then to about 2.20 for women born in the early 1970s.
How does the US completed cohort fertility rate compare with other countries?
One of the major goals of the new Trump administration, particularly the DOGE unit, was to shrink the size of the federal government’s budget. Did they achieve this goal?
Last spring both my co-blogger Zachary and I pointed to a tool from the Brookings Institution to track federal spending, pulling in data directly from the US Treasury in a convenient format. Back in March I said “this will be a useful tool to follow going forward.” Now we have a full year of spending data for 2025.
When we look at total spending for Calendar Year 2025, it was about $318 billion higher than 2024, or about 4 percent higher. So, it seems that by that measure, the cuts that the Trump administration made were too small to overcome the other areas that grew.
But…
It may be more useful to remove some spending from the equation. In particular, entitlement programs and interest spending are very large spending categories that aren’t subject to the annual budgeting process. Of course, any program is ultimately under the control of Congress, so it’s a little bit of a cheat to remove Social Security and Medicare, but those programs are on autopilot with respect to the annual federal budget process. They are worth talking about, but they are probably worth talking about separately (especially because they have their own funding mechanisms). And interest on the debt isn’t something a President can control directly: it can only be reduced in future years by closing the budget gap today.
Removing those programs — which constitute about $4.8 trillion of the $7.9 trillion in 2025 spending (so a lot!) — gives you this chart (note: figures have been slightly updated with more complete data since I originally posted this chart):
Federal spending by this measure was about $85 Billion lower in 2025 than the prior year, or about 5 percent. And that’s in nominal terms: it is an even bigger cut if we adjust for inflation. Notice too that the pattern fits what we might expect: spending was slightly higher in the first half of the year (before any Trump changes could have had much of an effect), almost exactly equal for most of the second half, and then slightly below once we get to November and December (after the Deferred Resignation Program layoffs in October). If we ignore the first two months of the year (when it would have been really hard for Trump to have an effect), the drop in spending is about 8 percent.
What were the biggest cuts that led to the $85 billion drop? Keep in mind that some programs increased spending, such as military spending, so there are more than $85 billion in cuts. Using the Daily Treasury Statement categories, here are the big ones:
Federal Financing Bank (Treasury): $59 billion
Department of Education: $46.8 billion
USAID: $30.2 billion
EPA: $17 billion (though EPA seems to have gone on a spending binge at the end of 2024. Compared with 2023, the first Trump year was 50% higher!)
Federal Employee Insurance Payment (OPM): $16.3 billion
Those are all the programs I could find that declined by at least $1 billion, totaling a little over $200 billion. There were some other highly salient cuts that were under a billion dollars (such as the Corporation for Public Broadcasting, which was completely eliminated). Looking at that list I don’t think there is an easy way to sum up a “theme,” but I think the real theme is that if the Trump administration wants 2026 discretionary spending to be even lower than 2025, they will really need some major action from Congress. These cuts are mostly low-hanging fruit, and some are long-running goals of the GOP (such as Dept. of Education, foreign aid, and public television).
Of course, to really get federal spending under control, Congress will have to tackle entitlement reform and shrink the budget deficit to lower interest costs. Social Security, Medicare, and interest payments — the bulk of federal spending, over 60% of the total — increase by 9% in 2025. Again, it was probably unreasonable to expect Trump and Congress to have done anything major with them in a single year, but something must be done soon: the Social Security Old Age trust fund will be depleted in about 8 years, and the Medicare Part A trust fund will be depleted in about 10 years.
With the arrest of Venezuelan President Maduro, the US is potentially attempting to remake the institutions of yet another country. I say potentially because, as of now, all that has happened is that Maduro was removed. His VP stepped in to replace him, and it appears that, for now, the rest of the structure of government is in place.
Nonetheless, any time the US intervenes in the affairs of another country, it brings back the old debates about regime change, nation building, exporting democracy, etc. Many want to discuss the legal and moral implications of these actions — and these are certainly worth discussing! — but as social scientists we should also ask “does it work?”
For example, one excellent paper on regime change via CIA covert intervention is from Absher, Grier, and Grier. They look at five cases during the Cold War in Latin America of CIA-sponsored regime change, and find moderate declines in income and large declines in democratic institutions. Not a good case for regime change and exporting democracy!
But what if we look at more recent interventions — post-Cold War — and look at direct military interventions by the US, rather than covert CIA operations or indirect funding of factions within a country. This is more in line with what might be happening in Venezuela right now (if regime change is ultimately what the US military pushes for). Using a list from Chris Coyne’s book After War (table 1.1) as a starting point for the relevant cases, and then using data from the V-Dem Liberal Democracy Index, we have seven cases since 1990 to examine (note: I have added Libya to Coyne’s list, which I believe is the only new addition of explicit military intervention since he created the list):
The first thing you might notice is that relevant to their starting position (pre-US military intervention), all except one of these countries saw improvements in their V-Dem Liberal Democracy Score after 25 years (or whatever the end point is for those more recent than 25 years). Some of the improvements — such as Libya, Somalia, and Iraq — are quite small, around 0.1 points on the 1-point scale. But other improvements — especially Kosovo and Bosnia — are quite large, around 0.3 points on the 1-point scale.
The one decline is Afghanistan, though you will note that during the occupation (which lasted a very, very long time, until 2021) their liberal democracy score did improve slightly, about as much as Iraq. I should also note that if we didn’t use my 25-year cut-off, Haiti would also have slipped back to roughly where they were in 1993, with a large decline happening since 2020.
For reference on this scale: the US scores 0.75 in 2024, the best scoring country is Denmark with 0.88, the World average is 0.37 (or 0.29 weighted by population), and the European average is 0.62 (or 0.56 weighted by population).
So while the improvements in Kosovo and Bosnia are impressive, they still fall below the average score in Europe. And those examples point to another problem with my simple analysis: we don’t have the counterfactual of what their score would be without US intervention. That kind of sophisticated analysis is what the above-mentioned Absher paper does (using synthetic control), but it’s more than I can do in a short blog post. Nonetheless, we should note that while we can’t say that US intervention caused these improvements, things didn’t get worse in most countries (as many critics of intervention assume always happens) — Afghanistan being the notable exception after the US ended the occupation.
Now that I’ve got the causation caveat out of the way, we should note a few more limitations of my analysis. First, perhaps the V-Dem Liberal Democracy Index isn’t the best one to use. Our World in Data has seven democratic measurement sets to choose from, and even from V-Dem there are others we could have used. I think Liberal Democracy best captures what we are usually talking about in terms of “does it work?” but you could use another measure. However, glancing through the other available measures, such as Polity, I don’t think the picture would be radically different with another measure of liberal democracy. 25 years is also somewhat arbitrary of a cut-off, though in Coyne’s book he uses 20 years, so I’m going beyond that.
Finally, I want to stress even more than on the causation point: none of these improvements mean the intervention passes a cost-benefit test. There was much destruction of lives and property in all of these cases, the use of US tax dollars, and some other harms to the US and international law (e.g., restrictions of civil liberties in the US from the War on Terror). I do not want to suggest that this means the interventions were worth the cost, merely that they did not fail on this one measure of improving democracy. It is also not a prediction that future interventions, such as in Venezuela, will succeed. Instead, I wrote this post because it goes against my priors (I would not have guessed improvements in 6/7 cases).
By almost any measure, 2025 was a great year for the United States.
Despite inflation remaining elevated and the damage from new tariffs, the economy did well. Inflation-adjusted median earnings are higher than a year ago, though only by about 1.3%. While most prices are still rising, one bright spot for affordability is that home prices are falling in much of the country (according to Zillow estimates).
The unemployment rate did tick up slightly, from 4.2% last November to 4.6% currently. This is definitely an indicator to watch over the next few months, but it is still well below average.
But even outside of the economy, there is plenty of good news in the data. Crime rates are plummeting. The murder rate fell something like 20%, as well as every major category of crime (violent crime overall is down 10%). This are some of the largest one-year drops in crime the US has ever seen.
Homicides aren’t the only category of deaths that are falling in 2025. For most categories of death as tracked by the CDC, there is a long lag (6 months or more) before all of the deaths are categorized. So we can’t look at complete 2025 data yet. For example, drug overdoses have increased massively in recent years, especially during the pandemic. But after plateauing in 2021-23, drug ODs started falling in 2024 and have continued to fall in early 2025. For the 12 months ending in April 2025, drug OD deaths were 26% lower than the prior 12 months. If we look at just the first 5 months of the year, 2024 was 20% lower than 2023, and 2025 was another 20% lower than 2024. For the first five months of 2025, ODs are basically back down to the same level as 2018 and 2019. Motor vehicle deaths also increased during the pandemic, but they are down 8% in the first half of 2025, essentially back down to 2018-19 levels.
Was it all good news? No, you can certainly find some data to be pessimistic about. For example, despite the efforts of DOGE and other attempts to cut federal government spending, over $2 trillion was added to the national debt in 2025, up 6 percent from the end of 2024 and surpassing $38 trillion. And as I mentioned above with the unemployment rate, there is some evidence the labor market may be weakening.
Not all is rosy as we head into 2026, but 2025 was a year filled with many positive trends on the economic front and in society more generally. May your new year be prosperous and healthy!
The chart shows a simple measure of relative grocery affordability. Starting with the levels of wages and grocery prices in 1947, if in any year wages increase more than prices, the line goes up (it can also go down, as it does in some years). Cumulatively, you can see that today groceries are over twice as affordable as in 1947.
You could reasonably complain that there hasn’t been much progress since the early 1970s. Fair enough. But there has been significant progress since the 1990s. Even if the progress is less than we would have liked, groceries are still, right now, the most affordable they have ever been in the US relative to average wages. And since US consumers spend by far the lowest share of their income on groceries in the world, we might be tempted to say that right now groceries in the US are the most affordable they have ever been in human history. Period.
This is not just a trick of using average wages, which can be distorted by outliers. First, we are already using an average wage series that strips out the highest earners (supervisors, managers, etc.). But we can show this more clearly by using a median-wage series, such as the CPS series (calculated by EPI) starting in 1973. Notice this affordability trend gets slightly better if we use median wages from 1973-2024:
It’s true that using the median wage series, 2020 and 2021 look more affordable than 2024 — but that’s because the compositional effects of the job losses in the pandemic really throw off the median wage. But the growth rate since 1973 is slightly better for median rather than average wages — it’s not a trick! And when we have the median wage data for 2025, it will also likely be the most affordable measure on this chart.
So why are people so pessimistic if wages have been rising faster than grocery prices? One theory: availability bias. People focus on the prices where they notice goods becoming less affordable, but ignore the ones that are more affordable. Many consumers could probably tell you that a dozen eggs increased from $1.40 per dozen in November 2019 to $2.86 today, and at times was much higher, topping $6 briefly in early 2025. Likewise they could tell you that a pound of ground beef soared from $3.81 in late 2019 to $6.54 today. Both of these prices increases vastly exceed wage increases over the same timeframe (about 33 percent for wages), but most consumers probably couldn’t tell you that these were outliers and most major categories of food increased by less than average wages since late 2019:
While the “beef and veal” category has clearly outpaced wages — by almost twice as much! — nearly every other category of meat and as well as other food product prices increased less than wages. Poultry is the one exception, though here it is almost equal to wage increases. But if we are talking about pork or fish, or the non-meat categories, most food is more affordable than in late 2019 relative to wages. Consumers won’t as easily identify these more affordable categories, and they probably have no idea how much average wages increased.
BLS is slowly (actually, it probably feels very quick for those working on it!) catching up on data releases that were delayed during the federal government shutdown. This week, we saw the release of the November jobs report, which also includes data from October, even though there was no separate release for October. Well, kinda.
For the household survey (which is used to calculate the unemployment rate, among many other measures of the labor market), there is no October report. Because there is no data to be collected. Look at Table A in the employment situation report, and you will see no data in the column for October 2025. Look at the FRED page for the unemployment rate, and you will notice a gap in October. As I wrote a few weeks ago, this is not the end of the world, but it is rather sad for a gap to show up in a series that consistently ran for 933 months back to 1948.
So what is in the jobs report? Lots of new information. A few related areas that have gotten a lot of attention this week are the changes in federal government employment vs. private sector employment, and the changes in native-born vs. foreign-born employment.
Last week I wrote a fairly long post in response to an essay by Michael Green. His essay attempted to redefine the poverty line in the US, by his favored calculation up to $140,000 for a family of four. That $140,000 number caught fire, being covered across not only social media and blogs, but in prominent places such as CNN and the Washington Post. That $140,000 number was key to all of the headlines. It grabbed attention and it got attention. So it’s useful to devote another post this week to the topic.
And Mr. Green has written a follow-up post, so we have something new to respond to. Mr. Green has also said a lot of things on Twitter, but Twitter can be a place for testing out ideas, so I will mostly stick to what he posted on Substack as his complete thoughts. I am also called out by name in his Part 2 post, so that’s another reason to respond (even though he did not respond directly to anything I said).
Once again, I’ll have 3 areas of contention with Mr. Green:
As with last week, I maintain that $140,000 is way too high for a poverty line representing the US as a whole (and Mr. Green seems to agree with this now, even though $140,000 was the headline in all of the major media coverage)
There are already existing alternative measures of what he is trying to grasp (people above the official poverty line but still struggling), such as United Way’s ALICE, or using a higher threshold of the poverty rate (Census has a 200% multiple we can easily access)
His idea of the “Valley of Death” is already well-covered by existing analyses of Effective Marginal Tax Rates, and tax and benefit cliffs. This isn’t to say that more attention is warranted, but Mr. Green doesn’t need to start his analysis from scratch. And this “Valley” is probably narrower than he thinks.
UPDATE: Michael Green has written a follow-up post which essentially agrees that $140,000 is not a good national poverty line, but he still has concerns. I have written a new response to his post.
A recent essay by Michael W. Green makes a very bold claim that the poverty line should not be where it is currently set — about $31,200 for a family of four — but should be much higher. He suggests somewhere around $140,000. The essay was originally posted on his Substack, but has now gone somewhat viral and has been reposted at the Free Press. (Note: that actual poverty threshold for a family of four with two kids is $31,812 — a minor difference from Mr. Green’s figure, so not worth dwelling on much, but this is a constant frustration in his essay: he rarely tells us where his numbers come from.)
I think there are at least three major errors Mr. Green makes in the essay:
He drastically underestimates how much income American families have.
He drastically overstates how much spending is necessary to support a family, because he uses average spending figures and treats them as minimum amounts.
He obsesses over the Official Poverty Measure, since it was originally based on the cost of food in the 1960s, and ignores that Census already has a new poverty measure which takes into account food, shelter, clothing, and utility costs: the Supplement Poverty Measure.
I won’t go into great detail about the Official Poverty Measure, as I would recommend you read Scott Winship on this topic. Needless to say, today the OPM (or some multiple of it) is primarily used today for anti-poverty program qualification, not to actually measure how well families are doing today. If we really bumped the Poverty Line about to $140,000, tons of Americans would now qualify for things like Medicaid, SNAP, and federal housing assistance. Does Mr. Green really want 2/3 of Americans to qualify for these programs? I doubt it. Instead, he seems to be interested in measuring how well-off American families are today. So am I.
Tomorrow, the Bureau of Labor Statistics is set to release the first major report of economic data that was delayed by the federal government shutdown: the September 2025 employment situation report. It’s good that we will get that information, but notice that we’re now in the middle of November and we’re just now learning what the unemployment rate was in the middle of September — 2 months ago (you can see their evolving updated release calendar at this link). This is less than ideal for many reasons, including that the Federal Reserve is trying to make policy decisions with a limited amount of the normal data.
What about the October 2025 unemployment rate? Early indications from the White House are that we just will never know that number. Why? Because the data likely wasn’t collected, due to the federal government shutdown. There was some confusion about this recently, with many people asking why they don’t just release it. Well, that’s because they can’t release what they don’t collect: the unemployment rate comes from the Current Population Survey, a joint effort of the BLS and Census where they interview 60,000 households every month. The survey was not done in October. It would not be impossible to do this retroactively, but the data would be of lower quality and, again, quite delayed. That gap in a series that goes back to 1948 wouldn’t be the end of the world, but it is symbolic of the disfunction of our current political moment.
What about GDP? We are now over half way through the 4th quarter of the year, and… we still don’t know what happened with GDP in the third quarter of 2025. BEA is in the process of revised their release calendar too, but they haven’t yet told us when 3rd quarter GDP will be released. In this case, the data was likely collected, but there is a certain amount of processing that needs to be done. Sure, we have estimates from places like the Atlanta Fed’s GDPNow model, but the trouble is… many of the inputs it uses are government data which haven’t been released yet for the last month of the quarter.
Eventually, all will mostly be well and back to normal, even if there are a few monthly gaps in some data series. The temporary data darkness may be coming to an end soon, but I fear it will not be the last time this happens.
Economist Writing Every Day 