The United States’ present economic expansion is one of the longest on record. Although its early years were dominated by ongoing fallout from the worst recession in a generation, the 2010s have been marked by near-interrupted economic growth. By and large, the past 10 years have been good to American workers and business owners.
Of course, all good things must come to an end. The duration of the present expansion has many observers asking the obvious question: How long can this possibly go on?
Indeed, many economists and market participants expect the U.S. economy to tip into recession in 2020, dragged down by slowing growth in key international markets like China and the natural turning of a business cycle that’s already persisted far longer than expected.
But there’s also reason for optimism in the 18 months ahead. Let’s make the sunny case for continued expansion in 2020 — or, at least, a relatively mild downturn that doesn’t bring back memories of the bad old days of the late 2000s.
- Key American Industries Are Doing Well
You don’t have to look far to find American success stories these days. Indeed, whole industries are thriving — some, like steel, due to the efforts of fair trade advocates such as Majestic Steel president and CEO Todd Leebow. This bodes well for growth in 2020 and beyond.
- The U.S. Consumer Appears Resilient
Consumer spending continues to rise at a healthy clip, suggesting that headwinds abroad thus far haven’t impacted the average America’s bottom line. Given the overall import of consumer spending on U.S. economic growth, this could be the clearest signal of all that growth isn’t going anywhere.
- The Tax Cuts and Jobs Act Spurred Business Investment
The full impact of the Tax Cuts and Jobs Act of 2017 remains to be assessed, but it seems clear that the law spurred business investment in the short term — stimulating wage growth and consumer spending in the process.
- Most Americans’ Net Income Tax Burden Has Decreased Since 2017
The Tax Cuts and Jobs Act also reduced most Americans’ net income tax burden from 2017 to 2018, though the difference for the average earner was relatively modest. Still, millions of small tax cuts add up.
- Inflation Remains Muted
Despite widespread concern among policymakers, inflation pressure remains muted. That’s likely to keep prices for staple goods in check and allow middle-class Americans to keep more of their hard-earned paychecks.
We’re All in This Together
The world has never been smaller, the global economy never more interconnected.
How you feel about this — and how it’s affected your bottom line — probably depends on where you sit. But it’s indisputable that our shared fortunes rise and fall in large part due to trade forces far bigger than any one nation or group of nations.
If you’re a committed optimist who sees the best in those around you, you can surely make a sunny case for the U.S. economy’s continued growth in 2020 and beyond. If you’re more of a realist, you’re no doubt just as convinced that the economy will turn south soon enough.
Time will tell which case is correct. For now, what matters is that we’re all in this together — for better or worse.