An Update of the United States Economy

The economy of the United States has been on the path of recovery from the great recession that started in the early 2009. What can we expect this year and in the future?

According to the U.S. National Bureau of Economic Research (the official arbiter of U.S. recessions) the US recession began in December 2007 and ended in June 2009. June 2015 marks the six year anniversary of the end of the Great Recession that extended over 18 months in the history of the U.S economy. But it might be too premature to celebrate yet.

So, how well is the economy of the United States doing in 2015? Well, according to the experts, it’s doing a lot better than it had been in recent years. Bill Conerly, an author and contributor of Forbes wrote that “The economic outlook for the United States in 2015 looks solid”

Bill also wrote: “The economy is growing largely because that’s its underlying trend. More people are available to work due to population growth, the general level of skills in the workforce is gradually improving, and physical and intellectual capital grows in magnitude and quality.” – Bill Conerly | Economic Forecast 2014-2015: Looking Better With Help From Oil And Gas – Forbes

When is another recession likely?

The economy of the United States showed a rapid growth in 2014, and the trend continues in 2015. However, if we look at the history of the economy United States we see that the longest we have gone between recessions is ten years. So, judging from the history, we might have another recession coming in few years because we have already gone through six years of recovery after the last Great Recession of 2009.

“I know it’s coming, but I’m not sure when.” Says Bill in his article “The Next Recession: Cause and Timing.” According to Bill, the timing of the next recession will depend on how and when the Federal Reserve is tightened. Unwinding of the Federal Reserve’s stimulus is going to be the most likely cause for the next recession.

Analysis of the economic indicators

An analysis by econintersect.com suggests that Economic Index seems to be weakening in all tracked sector of economy in 2015. They also suggest that when data is this weak, it could be thought of as recessionary.

“The significant softening of our forecast this month was triggered by marginal declines in many data sets which are dancing closer and closer to zero growth.” – econintersect.com

Consumers continue to outperform businesses.
Growth of income and expenditure remains nearly the same.
Consumers continue to spend high percentage of income.
The correlation between retail sales and employment has declined.
When Econintersect checked the economic growth, they concluded that it has been slow.

Conclusion

Federal monetary policy has a huge impact on the economy of the United States. Tightening of federal monetary policies could lead to a recession in the near future. Even though the consumer spending to income ratio has increased since 2013, recent data is showing that economy is slowing down and there has been real slow progress this year in every sector of economy. Job creation rate has still not increased at the rate we would like to see. Consumers are buying but it does not reflect the actual growth of our economy or growth in our national income or employment rates.