Can the US Economy Go its Own Way?
|What is the quality of the US recovery? Is it sustainable? Can it last if the rest of the world wanders in varying degrees of economic purgatory? American GDP was 0.95 percent annualized in the first half of the year. In the first seven months 1.6 million jobs were created, the best track in over 15 years yet many of those jobs were part-time. The unemployment rate has dropped steadily over four years but largely because people have forgone work. The labor participation rate is at its lowest level in more than a generation. Since the beginning of 2012 the annual increase in average hourly wages has been but 2.0 percent. Real inflation, the kind that affects household spending has averaged 1.8 percent, leaving little extra income to boost spending. Real personal consumption has grown 2.1 percent annually for the past two-and –half years barely half its 3.5 percent rate in the first half of the last decade. If the U.S. economy is 70 percent consumption how will rising economic growth obtain? We will try to make sense of recent US economic statistics, put them in historical context and judge the degree of prospective U.S. autarky?
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