The Federal Reserve expects the U.S. economy to grow in the 2-percent range for years into the future and many economists agree.
The labor force is shrinking as Baby Boomers age, curtailing the number of people available to fill jobs; older people living on savings or fixed incomes also tend to buy less.
In addition, growth in productivity – the amount a single worker can produce in a set period of time – has slowed. This has been a long-term trend in the United States and we see no new, short-term powerful drivers emerging to reverse it.
TREND FORECAST: There will be a lot of talk from Congress and the White House for more infrastructure and education spending to boost the slowing economy. Little will be achieved next year as a result of a deadlocked Congress, thus the impact will be negligible. Indeed, even if they did agree on a fiscal stimulus package, it will prove ineffective to boost growth.
