By Isaac Cohen*
The US economy is closing 2019 vigorously, as indicated by the creation of 266,000 new, non agricultural jobs in November and by the unemployment rate returning to 3.5 percent, the lowest in fifty years, while inflation remains under 2 percent.
True, this year’s performance is less vigorous than in 2018, when average monthly job creation reached 223,000, while thus far in 2019 the monthly average is 188,000. Several factors are contributing to the slowdown, such as the vanishing effects of the 2017 tax cut, the global synchronized slowdown and the White House protectionist measures. Some sectors have been more exposed than others, for instance manufacturing jobs increased in November mainly because the end of the strike at General Motors, while business investment has fallen throughout this year and farmers in the Midwest are hurt by the trade confrontation with China.
At 11 months from the next elections, the question is if this year’s economic performance will last into next year. The last growth estimate for this year’s fourth quarter, by the GDPNow model from the Federal Reserve Bank of Atlanta, is 2.0 percent, up from 1.5 percent. https://www.frbatlanta.org/cqer/research/gdpnow?utm_medium=email&utm_source=mailchimp&utm_campaign=data-and-tools&utm_source=Atlanta+Fed+E-mail+Subscriptions&utm_campaign=c98165fd47-weekly-digest-2019-12-09&utm_medium=email&utm_term=0_b7a27f0b85-c98165fd47-216602829
Projections for 2020 are that annual growth of 2 percent will continue, assuming trade tensions with China will be resolved by mutual agreement. However, President Donald Trump said, this week, trade negotiations with China may go on until after the 2020 elections, with another increase in US tariffs against imports from China expected by the end of this week.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
