2020 Economic Outlook

The outlook for 2020 for the US economy is overall good, according to key indicators including: interest rates, stock market, consumer expectations, inflation, employment and, in particular GDP rate as that is an accurate indicator of America’s production output.  However, others have suggested a reduction from the 2019 2.2 percent figure to 2 percent this year. Indeed since 2017, real GDP growth was actually higher than average with a 2.5 percent figure for each calendar year.  This was mainly attributed to fiscal stimulus.

With Trump’s promise to boost advancements in the economy to 4 percent which is extremely fast, and – some would say – even too fast leading to overconfident consumerism. This could then result into a problematic boom and ultimate bust to the economy.  Indeed, there has been a marked growth spurt in the nation’s economy, especially as compared to other developed economies.

The dollar is also encountering a safety net, similar to the Swiss franc and Japanese yen.  This means that investors will more likely want to put money into US bonds and stocks.  There is an anticipated 3 percent growth within the next two years of the US dollar.

US Economy and Growth

America’s economy has enjoyed a steady solid growth rate for over 10 years.  The question is, where, how and what does the next decade look like?

According to a recent Bloomberg article, most of the wealth that the nation has generated has been from just 1% of counties. A recent report from the Bureau of Economic Analysis  found that a staggering 32.3% of US GDP was generated by 31 US counties.  What is perhaps even more odd about this statistic is that last year those 31 counties had only 26.1% of employed Americans.  

So it seems that the bones of the US economy is becoming further concentrated in larger cities and by the coasts.  Rural counties are dying down which could have implications for labor mobility and infrastructure spending.

But who exactly are these people who are bolstering the economy today?  According to a recent article in Yahoo Finance it is the immigrants who are making this happen: 

“Over the last decade, 42% of the net growth in U.S. population, and 54% of the net growth in the workforce, can be attributed to immigration. During the same period, the birth rate of native-born Americans has decreased, and the death rate has increased, due to aging. Immigrants now comprise roughly 15% of the total U.S. population. And because they tend to be younger than native-born Americans, immigrants now comprise about 17% of the U.S. workforce.”

With unemployment back at to its lowest since 1969 and a 3.1 percent increase in average hourly wages from 2018,  wherever its coming from and whoever’s providing it, the employment situation in America is positive.

US Economy 2019 Predictions

Road ahead for 2019

Despite the country countering perhaps its longest ever government shutdown – resulting in a projected decrease of US GDP by $8bn in Q1 2019 – the Congressional Budget Office has predicted a growth in economy of 2.3 percent this year. 

Still, that is a hit given that 2018 saw a 3.1 percent increase.  Tax cuts and federal spending increase attributed to that growth.  even though currently there are concerns due to the US-China trade tensions and concerns of an international economic slowdown, the fact that the CBO is predicting even 2.3 percent is good news.

In its Budget and Economic Outlook: 2019-2025 Report the CBO stated:

“federal revenues rise from 16.5 percent of GDP in 2019 to 17.4 percent in 2025 and then grow more rapidly, reaching 18.3 percent of GDP near the end of the decade. The projected growth in revenues after 2025 is largely attributable to the scheduled expiration of nearly all of the individual income tax provisions of the 2017 tax act.”

Still, the US economy cannot afford to rest on its laurels.  according to a recent CCN article, America’s place on the world economic throne is likely to be challenged and:

“The United States will fall to a third place in the ranking of the largest economies in the world. China and India will overtake the U.S. by 2030, and it is unlikely that we will ever get the throne back.”