Points to watch for in US President Barack Obama's final State of the Union speech

 

President Barack Obama delivers his State of the Union address to a joint session of Congress on Capitol Hill. Photo / AP

President Barack Obama delivers his final State of the Union address tomorrow to a nation whose economy is far sturdier than it was when he took office in 2009.
Yet as 2016 begins, the stout job market is accompanied by tepid economic growth and stubbornly flat wages. More broadly, two things are on the rise, to the President's dismay: global temperatures and Americans' concerns about terrorism.

1. The big picture

Friday's December jobs report capped a strong year in which employers added 2.65 million positions. That made last year the second best year since 1999 for job gains, exceeded only in 2014. For a third straight month, the unemployment rate was 5 per cent. But average hourly pay seems stuck, sliding one cent last month to US$25.24 ($38.67). That left the growth of average pay at 2.5 per cent last year, below the 3.5 per cent economists consider healthy. The latest figures show the overall economy growing at a modest 2 per cent annual rate in last year's July-to-September quarter, though analysts expect improvement.

2. The economy, from other angles

For Wall Street, 2015 was a roller coaster. Record highs followed by an abrupt swoon prompted by worries about the strong dollar's impact on exports, China's slowing economy and sagging oil prices. By year's end, the Dow Jones industrial average had faded by 2.2 per cent, its first down year since 2008. And it began this year with steep declines fuelled by continued China worries. Through November, the most recent figure, inflation grew by 0.4 per cent for the past 12 months. That minuscule rise was well below the annual 2 per cent increase the Federal Reserve prefers.

3. Consumer bonuses

Oil prices slumped to their lowest levels since 2004. That meant bargains at the pump where prices were down slightly from a year earlier. A typical household saved US$660 on its gasoline costs compared with 2014, the federal Energy Information Administration said. Though the Federal Reserve raised a key interest rate for the first time in seven years, homebuyers' mortgage interest rates remained at 3.97 per cent last week, up slightly from a year earlier but well below the historic 6 per cent average.

4. Healthcare

The Administration says that with the sign-up deadline still three weeks away, 11.3 million people have enrolled for 2016 coverage under Obama's 2010 healthcare overhaul, similar to last year's enrolments. Though that law has helped decrease the number of uninsured people in the US, progress may have paused. The Gallup-Healthways Well-Being Index, an independent survey, says 11.9 per cent of adults remained without coverage as 2015 ended, about the same number that began the year uninsured. People remain concerned about rising costs of prescription drugs. Many face employer-provided coverage with growing premiums, deductibles and other out-of-pocket costs.

5. Secure, or not?

There was a growing threat from Isis (Islamic State) and escalating efforts by the US to combat it; Republicans say the Obama Administration hasn't done enough. The November killing of 130 people in Paris and last month's shootings in San Bernardino, California, by a radicalised Muslim couple helped fuel public worries. Polls show growing concerns about terrorism and allowing Muslims to enter the US. Obama and Democratic presidential frontrunner Hillary Clinton have criticised Republicans for what they say is demonising Muslims and thereby helping Isis attract recruits. There were 9800 US troops in Afghanistan and 3300 in Iraq as 2015 ended, amid continuing violence in both regions.

6. More guns

The FBI conducted more background checks on gun buyers in December than in any month since the system began in 1988. It processed over 3.3 million checks in December and 23.1 million in 2015, its busiest year ever. That could be in reaction to Paris and San Bernardino. Despite Obama's recent executive actions aimed at curbing gun violence, gun manufacturers' stocks have risen in value.

7. The heat is on

More than 200 nations reached agreement last month to try curbing global warming by restricting the use of fossil fuels, which emit heat-trapping gases. It was an Obama priority. Yet the National Oceanic and Atmospheric Administration said last week that 2015 was the second warmest and third wettest year in 121 years of record-keeping for the lower 48 states, in part thanks to the El Nino natural warming of the Pacific Ocean that affects climate worldwide. NOAA expects figures later this month to show that last year was the hottest ever recorded globally.