Is The US Economy Slowing Down?

There always seems to be a lot of noise and chatter surrounding the current president Donald Trump. But despite the controversies, we think the president deserves plenty of credit for the U.S. economy, which is stronger than it has been for a while. The employment rate in the country has held steady at over 60%, and business confidence has been restored as the government made it easier for people to put up their businesses. And although the stock market has remained largely flat, investors remain hopeful on how robust the U.S. economy is. Yet, despite this there are signs that it is slowing down in 2019.

This notion was put forward by Federal Reserve Chairman Jerome Powell in the Fed’s semi-annual monetary report to Congress. Powell noted that the overall world economy was slowing due to a number of international issues: “Growth has slowed in some major foreign economies, particularly China and Europe. And uncertainty is elevated around several unresolved government policy issues, including Brexit and ongoing trade negotiations.”

His speech on the U.S. economy caused a ripple effect across the globe, with the economic calendar on FXCM showing that his testimony caused a lot of market volatility. This shows how despite growth in the U.S., the global economy is still wary of the economic policies of the Trump administration. However, there was good news as the job market in the U.S. was shown to still be strong, and in 2018 the economy had grown by 3% compared to 2.7% in 2017.

Powell also had a two-hour testimony before the Senate Banking Committee and touched on the conflicting signals that the Fed has been trying to decipher. Reuters reports that this includes disappointing data on retail sales and other aspects that were in contrast with the steady hiring, wage growth, and ongoing low employment rate in the country. Again Powell pointed to international economies as the reason for slowing the U.S. economy down.

Powell remains hopeful though, as the flow of new workers into the labor force has increased, showing “there is more room to grow.” His appearances on Capitol Hill are part of his semi-annual testimony to congress. Questions ranged from the sources of rural poverty to the impact of climate change on banks, and to all of the questions, Powell has promised to give an open and transparent review.

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