Economic Recession Predictions: How The Economy Is Doing?

Jobs, jobs, Jobs, the promise of U.S President Donald Trump when he was elected as a President. The tax cuts and increasing government expenses have been a surge in federal budget deficits. Bipartisan Congressional Budget Office has predicted that this year it would average $1.2 trillion a year or 4.4% of GDP up from an average 2.9% of gross domestic product over the past 50years. Thus eventually the debt will increase by about $12 trillion from roughly $22 trillion.

Labor Department report shows that employers in the United States added 181,000 jobs in April that was 196,000 in March. Some economists said that March month employment growth was stronger despite recent weakness among manufacturers. This growth could top 200,000 for the seventh time in twelve months.

U.S interest rates remain intact despite Trump’s call for a reduction of at least one percent due to the labor-market strength. Federal officials voted to keep borrowing costs in the range between 2.25% and 2.5% at least till mid-June.

Economy News: Labor Market and Inflation

As consumer prices are slowly rising than the Fed’s 2% target, the officials worry that scarcity of workers might force manufacturers to pay higher wages that will trigger inflation. According to Charlie Ripley, the senior strategist at the Allianz Investment management, “We are in the environment where labor markets are tight, but we have not seen inflation.” But the economy is uncertain, and in the meantime, businesses are investing more resulting in U.S stock indexes to reach new heights.

Fiscal Stimulus and its Effect

Jerome Powell Fed Chairman told that technological advancement might be boosting the worker’s productivity that allows employers to get more output from the personnel without increasing wages. According to Automatic Data Processing private employers added 275,000 jobs in April that is the fastest pace in nine months. This figure was more than double the jobs added in March and also above the Fact set survey. In 2017 President Trump pushed for $1.5 trillion of tax cuts as the way to extend the U.S economy. This efforts of fiscal Stimulus takes place only when the economy needs a boost. After all million of million jobs works out to be 4 million. Additionally, the number of employees increases by 4.6 million to about 156.7 million; thus President Trump has met his goal.

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