US Economy

Despite the meteoric rise of China, the US economy still holds the crown for largest national GDP (by nominal standards). But as Chinese growth rates often exceed 6%, in the next decade they will likely surpass the US on this metric.

What’s the US economy like?

The US economy is a highly developed mixed economy, with services accounting for 80% of GDP.

As of now, the economy is also approaching full employment, with around a 96% employment rate. This in turn is putting upward pressure on inflation.

Is growth good?

While the US isn’t experiencing the growth it once knew, it is still expanding at a steady rate. The economy is strong today and has began to pick up after scraping through The Great Recession; growth this year is expected to come in somewhere between 2–3%, which is stronger than a basket of comparable economies worldwide.

It’s good news as well that the Fed is looking to wind down its balance sheet after a decade of unprecedented monetary aid in the form of quantitative easing.

With any luck, this and increasing interest rates will give the central bank some ammunition when it comes to the next recession, and the economy won’t be as damaged as post-2007 crisis.

Either way, you need to make sure your investments are on the right side. These articles can help you do that.

Trade Dictators Know What’s Best

If you remember, Trump and Xi are still honouring their trade halt agreement. Both men said they would hold off on any further import taxes until 1 March. But we’re close approaching this date. It might be very unlikely Trump and Xi will come to a complete agreement in the next 21 days.

The Wrong Moves to Make in a Trade War

Long-term I think this is all moving in one direction. A localised world where local businesses cater to local demand. Why do I say that? Because everyone is getting better at producing things each year. Efficiency gains are out striping demand growth.

The Art of (Trade) War

I would love to tell you when this trade war ends. But the truth is I have no idea. What I am certain of, and I think this is even more important, are the differences between the US and China.
Money Morning Australia