Yesterday the 4th quarter GDP report was released and it showed that the US economy completed the year with a 3.1% growth rate. It just so happens that I tackled this topic two years ago today in the Q&A of the day. I’m going to briefly walk you back through that story which illustrates the arguments to show you how we've arrived at the best economy in a generation.
(FROM MARCH 2017) The last year that the US economy grew at a 3% or better rate was 2005. The average historic growth rate of the US economy is 3.2%. So, in otherwords,we haven't had even an average year of economic growth in nearly over 11 years. It's true that the larger an economy is, the harder it is to sustain a higher growth rate going forward. The consumer is clearly the most important ingredient in the US economic growth rate. The first headwind to improving the US consumer growth rate is the population growth rate. The historic average US population growth rate through the year 2000 was 1.2%.As of February 1st, 2017, the year over year population growth rate was .69%. So, the decrease in population growth is two-fold. First, it's one of the basic economic arguments for increasing legal immigration into the US. The macro trend has been that as women have become equal players in theworkforcefamily sizes have been falling. However, the most important factor of all is labor participation and income growth. As of 2017, the US economic growth is at 62.9%. That difference of 3.1% is huge when we're talking about obtaining 3%+ economic growth.
Does it all make sense now? Consider the source for information. Agree with me or don’t agree with me, it's ok. I’ll always tell you the truth. I’ll be analytical and I’ve not made a career out of being wrong.
Here’s a link to the original story: https://ihr.fm/2EGfULz
Here’s a link to the original story: https://ihr.fm/2tJ8H77
Here’s a link to the original story: https://ihr.fm/2H9k0xo
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