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What is the US economy like? The "new world" is becoming more complicated
Source: | Author:pro44a8b7 | Publish time: 2019-06-27 | 126 Views | Share:
According to foreign media, since July 1 this year, the US economic growth period has entered the 121st month, setting a longest record, supporting the sustained growth of the economy
According to foreign media, since July 1 this year, the US economic growth period has entered the 121st month, setting a longest record, supporting the sustained growth of the economy, from the continuous low-interest interest rate for 10 years and the large-scale intervention of the Federal Reserve to help 2200. 10,000 people returned to work. But the real economic recovery may just be just getting started, and from a recent history, the recovery may be approaching a subtle moment.


"We are catching up now"


Reuters reported on July 1 that US gross domestic product (GDP) reached its potential level valuation last year, surpassing the Congressional Budget Office analysts believe that if the 2007 real estate bubble did not break, the investment bank Lehman Brothers did not go bankrupt in the following year. The world has not fallen into the deep recession, the level that the US economy should have reached.


The period when GDP exceeds the potential level is usually the period in which the workers' wages increase the fastest and the marginalized groups can find jobs. In recent years, these periods have not lasted for a long time, and the Fed and other officials are working hard to solve this problem. They are weighing the possible rate cuts and assessing the current stage of the US economy.


"We are catching up now." Although the economy has been growing since June 2009, the National Bureau of Economic Research has designated June 2009 as the "bottom" of the recent recession, and the chief economist of Mellon, Vincent Tee Rehart said.


The report said that as the economic growth period approaches the 10-year mark, the market is increasingly speculating on how long this round of recovery will last, whether it will inevitably re-emerge in the next few years, and whether the Fed and the US government are fully prepared. Ready to fight another round of recession.


To achieve the progress that the Fed and government officials believe is necessary to rebuild the income of the middle class, the economic recovery may continue for several more years.


The environment has changed


The Fed hinted in mid-June that it might cut interest rates as early as this month; now it is trying to deliver the same message, hoping to keep the “tight” economy for a few more years, allowing workers to enjoy a greater proportion of economic output. Out.


But the big environment has changed.


According to the report, in the short term, global trade disputes and other risk factors may slow down the economic pace, regardless of what the Fed does.


Inflation risks may be low, but the expected level of economic growth potential is not high, and the US population is getting older and productivity is falling behind, which will drag down the potential of workers to improve their situation.


The uneven income and wealth and the impact of automation on the workforce have become increasingly worrying issues; but keeping interest rates at too low levels may create excessive debt risks similar to the one that led to the last financial crisis.


According to the report, since 2001, the US economy has only experienced more than 12 seasons, including the last four quarters. Labor compensation accounted for slightly more than 56% at the beginning of this year. In dollar terms, it was about $1.5 trillion less than the peak levels of the 1960s and 1990s.


The report believes that the period of economic expansion may have reached a record, but the Fed may need some courage to continue this recovery, which is just beginning in many respects.


“It feels like a new world, facing a decline in structural global demand, and our economy is structurally less resilient,” said Nathan Hitz, chief economist at PGIM Fixed Income. “This is the essence of our new world. It has indeed become more complicated.”