The U.S. economic growth in 2020 will be affected by many factors including the coronavirus pandemic. Roger Kaplan commented that it is not easy to determine how coronavirus can impact the economy.
In the beginning of the pandemic, many business owners has temporarily closed for fear of exposing themselves to the virus. Huge factories either reduce the number of workers or were shut down as well. What adds to the economic impact, is panic buying and the increased need of supplies.
Global growth will not be brisk, but more likely, it will be a bit slow as stabilization arise due to fewer doubts when it comes to trade. One point is the signing of the U.S.-Mexico-Canada Agreement, Phase One agreement with China, and the Brexit, that are major economic factors.
Most likely, growth in U.S. manufacturing will not speed up, for now. Another is the production of the Boeing 737 Max airline, which will lessen U.S. GDP by 0.4% on the first quarter of the year.
With only 2.0% and 2.25% as growth for the GDP, it is not very impressive compared to other years. Some of the reasons were an ageing population and slow workforce increase, including limited productivity growth as it impedes potential positive growth.
To improve the U.S. economy, there should be reforms that can be done to upgrade U.S. workforce development. Without it, the GDP will languish because this is just one of those factors to address.
Important changes includes more concern for child care and transport services that will benefit marginal workers to stay on. Another is to allow more migrant workers to increase the U.S. workforce more.
The U.S. labor participation rate is at highest level since June 2013. In addition, the US economy is likely at or past the level of full employment. Unemployment is expected to decline to approximately 3.5% in 2020 from the current reading of 3.6% for the current rate.
There's a need for a better outlook on investments that will be far improved from 2019 levels that were substandard. Many business developments and U.S. consumers that factor in 70% of the GDP, might have surged in 2020.
Potential GDP Growth
Improving economic growth of the U.S. economy is the settle the government debt, under the public, which is already 79% of the GDP, and is $59 trillion that is the value of unfunded entitlements.
Oil Industry Outlook
A U.S. shale industry is now producing about 12.9 million barrels per day, of crude oil. Comparable to the production of Russia at 11.3 million barrels per day, 9.7 million barrels per day by Saudi Arabia.
Relying on other alternative and renewable energy will result in less use of fossil fuels as a whole. Renewable energy is getting more attention, as fossil fuels are seen as contributors to climate change. The slow shift to green energy is the focus of the energy industry as well.
All these views regarding U.S. economic growth in 2020 will depend on how the US leaders will steer their country. Also, coronavirus, along with other factors, will impact the U.S.
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