By Isaac Cohen*
On the eve of the US election, the acceleration of economic growth to 2.9 percent, during this year’s third quarter, augurs well for the continuation next year of the 7 year old moderate expansion of the economy. The last quarter growth figure was a notable improvement from the weak 1 percent growth of the first half of this year.
Again, consumers led the expansion, contributing almost 1.5 percent, while this time exports contributed almost 1.2 percent, due to an increase in soybean shipments. By contrast, private business investment disappointed, contributing only 0.5 percent to the growth spurt, perhaps due to the uncertainty generated by the end of the electoral campaign. Additionally, government spending continued declining, reaching the lowest level since 1950, to less than one fifth of the economy.
This may change next year because, in a rare instance of agreement, both presidential candidates from the major parties coincide that federal government spending must increase, although in different areas of the economy. Secretary Clinton proposes increases in infrastructure and education, while Mr. Trump proposes increases in security and defense.
The Federal Reserve Bank of Atlanta projects this year’s last quarter economic growth at 2.7 percent, which would amount to an annual growth rate of around 2.5 percent for 2016 as a whole.
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.