Thursday, January 30, 2020
U.S. 2019 GDP was Slowest Growth in 3 Years
Reporter, Jeff Cox, analyzed the percentages of growth of the the past three years and the main contributors that have caused these fluctuations between them. In 2019,the U.S. fourth quarter GDP only rose 2.1%. Overall, 2019 had only 2.3% of growth which is the slowest it has been since 2016. It has been reported that this is directly due to lack of business investments and is a consequence of the major trade war with China. Due to the trade war, imports fell 8.7%. Not only has the trade war impacted imports but it has severely impacted private domestic investment. Investments fell 6.1% this past quarter which is a huge difference from the 1% it dropped the previous quarter. To think things couldn't get any worse, the national debt is now past $23 trillion. Trump has been pushing for Jerome Powell to cut interest rates in order to help pacify the debt but can that really help in the long run?
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2 comments:
While people have seen the growth of GDP number shrink from years past, I would argue that the economy is actually proving how strong it is. While all of the factors such as the trade war and the lack of business investment is noteworthy, it's also noteworthy that with all of this, the Economy stayed strong and we never really fell off a cliff where it got super bad.
If you read the statements put out by the federal reserve board and Jerome Powel, they actually state that they are trying to keep the growth rate at a steady 2%. What they are trying to do is keep us at a constant pace that way the value of our dollar doesn't change significant and affect our ability to trade. However, with the world in such disarray, it will be interesting to see if we lower that desired 2% growth rate in order to continue trade with some of the affected nations.
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