The evidence that the U.S. economy has been accelerating is thinner than the headlines shout. But with the rest of the world economy improving and a possible tax-cut jolt coming soon, the good news is there is room for a pickup in growth.
In the years since the financial crisis, the U.S. economy has been in a deep rut: Growth averaged just 2.1% a year from the end of the recession to the first quarter of this year, making it the most tepid expansion on record. But lately GDP has perked up, growing at a 3.1% rate in the second quarter and 3.3% in the third. Put that together with steady hiring and an ebullient stock market, the economy looks very strong.
But much of the strength in GDP over the past two quarters wasn’t actually the result of stronger domestic demand. Instead, the growth was driven by a narrowing of the trade deficit and an increase in inventories, both of which will likely prove temporary. Absent trade and inventory swings, demand grew at an average rate of 2.4% over the past two quarters, matching the average pace over the previous four quarters.
https://www.wsj.com/articles/economy-has-room-to-grow-heres-why-1512309600
The Fed should move slowly on raising interest rates as to not slow our nation's current economic expansion.
ReplyDeleteFrom the economic outlook conference and articles I've seenI guess the majority of economists are in agreement about the economy continuing to grow in the future.
ReplyDeleteGrowth in foreign nations should benefit U.S GDP. This is especially the case if this growth boosts these countries' trade with the United States. This should increase exports. The changing taxes should benefit Gdp as well.
ReplyDeleteAs the overall trend in the economy is a steady growth with room for more, we should continue to see an increase overall. If we do continue to see growth, we should hope to see more domestic growth as we continue on into 2018.
ReplyDelete