The U.S. economy slowed in 2019 after two consecutive years of growth, according to the U.S. Department of Commerce.
In 2018, the economy expanded by 2.9 percent; in 2019 overall, the rate is calculated at 2.3 percent. For the last half of 2019, the rate was 2.1 percent.
Household purchases were responsible for 1.2 percent of 2019’s growth, down from 2.1 percent last fall.
Spending on almost all categories of goods fell, as did spending on restaurant meals, a standard gauge of consumer confidence.
Overall consumer spending rose 1.8 percent in 2019’s fourth quarter, compared to 3.2 percent in the third.
Corporate spending expanded at a rate of 2.1 percent in 2019 against 6.4 percent the previous year. Business investment, however, dropped during each of the last three quarters of 2019.
The 2.3-percent rate of 2019 was the slowest in three years, but it was on a par with the typical growth rates during the recovery from the Great Recession.
It also was slower than the 2.9-percent average expansion during the 2001-2007 recovery after the 9/11 terrorist attacks and well off the brisk pace of the boom of 1991 to 2001.
TREND FORECAST: President Trump’s statement in his State of the Union address on Tuesday night, “I am thrilled to report to you tonight that our economy is the best it has ever been” is an outright lie.
As noted, U.S. GDP growth for 2019 was just 2.3 percent. In the 1950s, GDP hit a high of 8.7 percent; the 1960s, 6.6 percent; the 1970s; 5.6 percent; 1980s, 7.2 percent; 1990s 4.8 percent, 2000s, 4.1 percent.
Thus, knowing that Trump says what he wants and does what he can to retain his crown as the Presidential Reality Show® Champ, again, as we have for several months, forecast that he will exert ultimate pressure for the Federal Reserve to lower interest rates this year to zero-to negative territory.
That in turn will be bullish for gold prices, since the lower rates go, so, too, goes the dollar. And the weaker the dollar goes, the world’s number one reserve currency, the higher gold prices rise.
