By Isaac Cohen*
The election of President Donald Trump pushed the well known University of Michigan index of consumer confidence to levels not seen since 2004. However, six months after the inauguration of the new government, the main campaign promises of tax cuts, less regulation and infrastructure spending still have to be approved. Additionally, after the testimony in Congress by the fired Director of the FBI James Comey, on June 8, the consumer confidence index decreased to 94.5, the lowest level since the November election.
Therefore, at the Federal Reserve Bank of Atlanta, (Weekly Digest: June 19-23, 2017 frbatlanta.org), the attention has turned to those long term trends which have kept the rate of economic growth at the moderate yearly pace of 2 percent, for the last nine years. Among them better productivity growth, above the yearly rate of 1.25 percent of the last decade, is perceived as the key factor for achieving the higher rate of economic growth of at least 3 percent a year, promised by the government.
Increased business investment is required to enhance labor productivity, understood as the amount of goods and services produced per hour of work. Another contributing factor to better productivity is the growth of the labor force, which is lagging behind due to the aging of the “baby boomers” and less immigration.
*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 Washington.
