After suffering the worst economic crisis since the Great Depression in late 2008 and 2009, recent years have seen the US economy experience a recovery that has been better than that of many other advanced economies. Like 2014, the 2015 economic trends discussed here show that the US economy is well on its way to full recovery.
Gross Domestic Product
This is a measure of the value of all the goods and services that are produced within the US in a specified time period. It is the economy’s broadest indicator. 2015 saw a continuation of GDP growth experienced in 2014. With an average of 2.5%, it is 0.1% higher than the 2014 growth rate. This trend is expected to continue into 2016 with a 2.8% average growth rate predicted.
This is the general rise of prices of goods and services. It is generally believed by economists that a 2% rate is the most desirable for the economy. A reduction in energy prices kept 2015 average inflation rate at just 1.1%. This is likely to increase to 2.3% by 2016’s end as the fall of energy prices is likely to stop.
Few economic indicators are felt more personally than employment. Overall, unemployment figures continued dropping as more jobs were added to the economy. By the end of the year, unemployment level is predicted to be just around 5.4%. However, the job growth has not been uniform as sectors such as mining continued posting job losses.
2015 has seen great strengthening of the dollar against other major world currencies. For example, the euro dropped 12% against the dollar while the Japanese yen dropped by 14%. This led to a significant rise in real imports because a strong dollar makes imports less costly.
Fall in Energy Prices
2015 saw the continued collapse of energy prices that began in 2014. This was largely a result of oil supply exceeding global demand. As explained above, this fall in oil and gas prices was a significant factor in the fall of US inflation rates. This is because energy prices affect the prices of many other goods and services consumed by the public.
Overall, 2015 economic trends have been quite positive for the US economy. As the economy enters 2016, these trends are likely to continue their positive trajectory. This will be good news not only for the US economy but for the global economy as well because a strong US economy is good for the whole world.
David Milberg is an investor from NYC.