It is estimated that America's economic growth is 128 months, the longest ever. It hasn't come easy. Despite the global output decline in 2016 and 2019, trade conflicts and monetary tightening by the Federal Reserve, economic growth continued. Last year's economic recovery was even stronger, despite the slowdown in business investment and reduced investment in housing, which was made possible by the steady growth of private consumption. Sustainability of spending is one of the most unusual features of this growth: faster growth of incomes of employees at the bottom of the income distribution, compared to highly paid employees. The welfare of low-wage workers may seem to be an underestimated contribution to the sustainability of the economic boom.
Since the turn of the millennium, demand rather than supply has been a major constraint to economic growth. The fact of moderate inflation indicates that expenditures during this period rarely exceeded the productive capacity of the economy. The average annual inflation was only 1.8%, compared to 3.5% in the previous 20 years and 4.5% in the previous two decades. As an explanation for the chronically weak demand, economists cited several reasons: from the aging of the able-bodied population to the suppression of investment appetites caused by the slowdown in technological progress. It is assumed that inequality has also played an important role.
Since the turn of the millennium, demand rather than supply has been a major constraint to economic growth. The fact of moderate inflation indicates that expenditures during this period rarely exceeded the productive capacity of the economy. The average annual inflation was only 1.8%, compared to 3.5% in the previous 20 years and 4.5% in the previous two decades. As an explanation for the chronically weak demand, economists cited several reasons: from the aging of the able-bodied population to the suppression of investment appetites caused by the slowdown in technological progress. It is assumed that inequality has also played an important role.
