Economic expansion sets recordEconomic expansion sets recordLuis TorresTorres


This month marks the longest expansion in U.S. economic history. According to the National Bureau of Economic Research, the expansion began in June 2009. Numbers released for July 2019 will show a record 121 months of continuous growth.

The expansion featured a downward trend in the unemployment rate that reached levels not seen since the 1960s. At the same time, an average 169,000 jobs were created monthly. The expansion was characterized by slow productivity and wage growth, and by low inflation and low interest rates. Recently, some wage growth improvements have been observed, including improvement for lower-income households.

Going forward, the economy should slow, the job market remain tight, and worker earnings rise steadily. Even with the expansion milestone, recession fears continue, fueled by growing risks from corporate debt and the leveraging of the nonbank system. Don't forget that long-run U.S. public debt is on an unsustainable path, and policy adjustments are needed to get public debt under control.

Past recessions have been triggered by financial imbalances, such as housing bubbles caused by excessive lending. Firms and markets are globally interconnected. Financial markets are dependent on low interest rates. With uncertainty on the rise over government policies, such as trade, a vehicle that is not currently apparent could bring expansion to an end. 


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