The global financial crisis (GFC) had a large negative effect on the US economy. A decade on, the economy is only starting to shake off the ill effects of the crisis. Investment levels have recovered over the past few years, the unemployment rate is at decade lows and inflation has picked up.
Still inequality has risen significantly as low wages growth over much of the decade has been felt by the middle class and less fortunate, who have not benefited from the large run up in asset prices. GDP growth is expected to stay between 1% to 2% p.a. from 2020 onwards. But higher US interest rates and the uncertainty associated with the Federal Reserve reducing its balance sheet, poses risk to the outlook. The US government’s recent tariffs and the subsequent response from China, represent a risk for both the US and global economy. Long term growth will be constrained by an aging population and slower productivity growth.