The U.S. economy probably won’t grow this year at the Trump administration’s 3.1-percent target rate, treasury secretary Steve Mnuchin admitted last week.
Mnuchin blamed the Coronavirus outbreak and Boeing’s woes with its 737 Max jetliner.
As of today, the U.S. Centers for Disease Control has reported, with great fanfare, the grand total of 13 confirmed cases of the virus in the Unites States – a country of 327 million people.
And although Boeing is one of the U.S.’s largest manufacturers and exporters and the 737 Max has been its best-selling passenger plane, at worst, a production shutdown lasting through March could trim a half-point of the first quarter’s GDP growth rate, some analysts predict.
Hard Facts
In 2019, the U.S. economy expanded at a modest 2.3 percent, with expectation that it will weaken to 2 percent this year.
Trump’s lowering corporate taxes from 35 percent to 21 percent did not produce the “trickle down” to the general public that was promised.
Furthermore, most of the 2017 U.S. tax cut hasn’t been invested in new plants and equipment or higher salaries for workers as Trump and his allies in Congress assured that it would. Instead, according to the Congressional Research Service, corporations have used about $1 trillion of the money to buy back their own stocks, raising share values.
Increasing share prices is a standard measure by which executive bonuses are calculated.
The nonprofit, nonpartisan Tax Policy Center forecasts that the richest 20 percent of Americans received about two-thirds of the tax cut’s windfall in 2018 and that, in 2027, the richest 1 percent will reap 83 percent of the cut’s rewards.
Not Great Jobs
The U.S. added 225,000 jobs in December, but some of them were holiday temp spots and most of the rest of the new jobs don’t pay strong wages.
Construction was a bright spot, adding 44,000 jobs. The other biggest gainers were education and health services with more than 70,000; leisure and hospitality, 36,000; and transportation and warehousing, 28,300. The retail sector shed 8,300 workers in the wake of the holidays and manufacturing dropped 12,000 jobs.
PUBLISHER’S NOTE: The low-wage service, clerking, and manual labor categories are adding jobs, but the economic slowdown still isn’t allowing growth in jobs that pay well and can support middle-class households and lifestyles.
And, with wages virtually stagnant when adjusted for real inflation, Americans are going deeper in debt.
In 2019, household debt marked its biggest annual increase since just before the financial crisis, surging by more than $600 billion, topping $14 trillion for the first time, according to a new report by the Federal Reserve.
