Wall Street New York Photo Credit : CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=243386
Call it continuation of economic growth resulting fom President Barack Obama’s policies or ‘Trump Bump’ in the form of stock exchange upsurge from President-elect Donald Trump’s election victory, the US economy appears set for an impressive expansion in the months ahead.
Among major signs of growth are addition of private sector jobs for the 80 straight month, a jump in Dow Jones’ Industrial Average, November seeing the lowest unemployment rate since August 2007, last week’s raise in Federal Reserves’ benchmak interest rate, wage growth staying ahead of inflation, and consumer confidence scaling the highest level in a decade.
In the latest sign, Wells Fargo/Gallup Investor and Retirement Optimism Index increased in November for the third straight quarter, bringing it to a nine-year high.
According to numbers released, the index, which gauges investor optimism, now registers +96, up from +79 in the third quarter. Among retired investors, the optimism index improved 36 points to +117 while increasing 11 points among non-retired investors to +89.
A statement says the Wells Fargo/Gallup Investor and Retirement Optimism Index fourth-quarter survey was conducted by telephone with 1,012 U.S. investors November 16-20. The index had last approached the current level in May 2007, prior to the 2007-2009 recession, when it registered +95.
Irrespective of what factors have contributed most citically to the rebound in US economy, the current optimism and market sentiment provides an opportunity the largest economy to consolidate its gains.
But, going forward, economists will be keeping a close eye on a host of variables as well as both internal and external dynamics.
Internally, Trump’s promise to initiate infrastructure projects could be a big boost for several sectors of the economy. But it will be interlinked with kinds of policies on issues like immigration and security issues the Trump White House will have. The economic policies will be of course a big catalyst in determining future growth prospects.
Externally, it is Washington’s relations with China, energy policy and the Trump Administration’s handling of sensitive politically promised moves on trade agreements like NAFTA, trade with neighbors and the issue of offshore jobs. Also crucial will be the overall world security scenario.
While the US economy has stood the test of recession and is bouncing back strongly, it also needs to proceed with a set of policies that stimulate activity at home and treads carefully on international issues in view of interdependence.
