By Isaac Cohen*
The US economy is closing 2016 vigorously and expanding. The Federal Reserve Bank of Atlanta projects the annual rate of economic growth, in this year’s last quarter, will reach 2.6 percent, while unemployment in November decreased to 4.6 percent, the lowest level in 9 years. Additionally, the transition to a new government and the announced appointments, to senior White House and cabinet level positions, of three former bankers from Goldman Sachs and of Exxon’s chief executive for the State Department have been welcomed as positive signals by business leaders.
This increased confidence in the economic outlook has led to a stock market rally, which pushed the Dow Jones Industrial Average to a new record of almost 20,000 points. Since the start of this year, the Dow Jones Index has gained 13 percent, with around 6 percent of the increase in the past five weeks, since the election. Even the anticipated increase in the federal funds interest rate, this week, confirms the central bank sees evidence of “strengthening growth and an improving labor market.”
Investors seem to be focused on the fact that President-elect Donald Trump will receive an expanding economy and expect the fulfillment of some campaign promises, such as less regulation, less taxes and more infrastructure investment. Less attention is given, for the time being, to other negative promises, such as a protectionist trade policy and massive deportation of undocumented immigrants.
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media. Former Director, UNECLAC.
