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US Economic Growth at a 6-Year Low

Published on: 27/01/2017

We have encountered a really strong dollar in the past month of two, despite fluctuations here and there, leading most analysts to believe that the American economy is blossoming. However, recent figures indicate that in 2016 the economic growth was only 1.6%; it has generally stayed close to this level during the years after the economic crisis, though this is the lowest since 2011, reports CNN. So what is in store for the United States?

Having a low economic growth is not necessarily as detrimental as it sounds. To a large extent this is a result from lower productivity, i.e. Americans are producing goods at a slower pace. Increasing productivity has been a challenge, but the States have worked towards improving other important aspects of the economy – during Obama’s second term of office unemployment rates were reduced in half and wages have consistently been increasing.

The slow economic growth is hailed as one of the reasons why Trump got elected. His promised policies of reinvigorating the infrastructure sector as well as lowering taxes are some of the measures that have the potential to kickstart growth. However, other possible decisions the new president has talked about, such as ending trade agreements with other countries, might have the opposite effect.

We might be seeing a turning moment in American economic history. After modest growth for 7 consecutive years under Barack Obama, we are likely going to experience big changes under Trump. Stay alert as any news pertaining to monetary and fiscal policy amendments are likely to affect the USD exchange rates and American stock market data.

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