U S Economic Outlook For 2019 And Beyond

Dated: 05/13/2019

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Veronica Nunez        Your Southern California Expert

(951) 403-4445 

www.VeronicaNsellsHomes.com RE0203119

U.S. Economic Outlook for 2019 and Beyond

The U.S. economic outlookis healthy according to the key economic indicators. The most critical indicator is the gross domestic product, which measures the nation's production output. The GDP growth rate is expected to remain between the 2% to 3% ideal range. Unemployment is forecast to continue at the natural rate. There isn't too much inflation or deflation

President Trump promised to increase economic growth to 4%. That's faster than is healthy. Growth at that pace leads to overconfident irrational exuberance. Thatcreates a boom that leadsto adamaging bust. The factors that  are supply, demand, capital availability, and the market’s perception of the economic future.

Overview

U.S. GDP growth will slow to 2.1% in 2019 from 3% in 2018. It will be 1.9% in 2020 and 1.8% in 2021. That's according to the most recent forecast released  on March 21, 2019.The projected slowdown in 2019 and beyond is a side effect of thetrade war, a key component ofTrump's economic policies.

The unemployment rate will be 3.7% in 2019. It will increase slightly to 3% in 2020 and 3.9% in 2021. That's lower than the Fed's 6.7% target. But former Chair Janet Yellen noted a lot of workers are part-time and would prefer full-time work. Also, most job growth is in low-paying retail and food service industries. Some people have been out of work for so long that they'll never be able to return to the high-paying jobs they used to have. Structural employment has increased. These traits are unique to this recovery.

Yellen admitted that the real unemployment rate is more accurate. It's double the widely-reported rate. (You can put this report into perspective by viewing the unemployment rates since 1929.)

Inflation will be 1.8% in 2019. It will rise to 2% in 2020 and 2021. The core inflation rate strips out those volatile gas and food prices. The Fed prefers to use that rate when setting monetary policy. The core inflation ratewill be 2% in 2019 through 2021. Fortunately, the core rate is at to the Fed's 2% target inflation rate. That gives the Fed room to raise interest rates to more normal levels. The U.S. inflation rate history and forecast provides a good basis for predicting the coming years’ inflation levels.

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Veronica Nunez

Veronica Nunez is a First Team Realtor in the city of Corona. She has been a Corona resident since 1997. Veronica has worked in public services for 23 years, fifteen of them for the City of Corona. Sh....

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