U.S. Outlook: Why 3.0% GDP growth looks like a long shot
President Trump talks about returning the United States to 3.0% GDP growth or better, and it’s baked into his FY 2018 budget plan to reach that milestone by 2021.
For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on June 9.Key observations:
- GDP growth in the current expansion has averaged a modest 1.8% per year, the lowest expansion growth rate in the postwar period.
- Nonfarm productivity growth defined as real output per hour worked was 0.0% at an annual rate in the first quarter.
- The labor force growth rate over the past 12 months is a modest 0.8%.
- The Federal Reserve estimates U.S. potential GDP growth today at around 1.6% per year, and that number is likely to slip further without a surge in productivity in the years ahead.