The American economy is finding itself in unknown territory, as it continues to see economic growth, a strong stock market, and stable inflation growth, but it also is seeing increased unemployment, decreasing consumer spending, and greater economic anxiety among average Americans.
The United States, and the global economy, were ravaged by the 2020 Covid pandemic, which halted global supply chains and lowered global production, leading to souring inflation.
Actions by the Federal Reserve, and intense spending by the Federal government, helped contain the damage, and the economy soon returned back to its pre-pandemic levels.
However, with the pandemic recovery period seemingly winding down, the U.S. economy is now facing somewhat of a reality disconnect. The economy is expected to grow and America’s wealthiest are continuing to consume at very high rates, but more and more Americans are saying they are spending less and struggling to find work.
This raises the question if there is something wrong with the American economy, or if this is just the reality of the market. What is clear is that something isn't adding up, and if the U.S. economy continues its current trends, there could be growing political risks that could see public frustrations break out into the open.
By the numbers
Major American financial institution Goldman Sachs believes real GDP growth could average around 2% until the decade’s end. Currently though, financial analysis firm Ernst Young estimates that real GDP growth for 2025 will be 1.7% while only 1.4% for 2026, but also believes growth will pick up post-2026.
