The U.S. economic expansion
The US economy is growing since July 2009; it means that current economic expansion is the longest one in modern U.S. history. It is an important milestone in the U.S. history as this e-conomic expansion started after the financial crisis in 2008 which severely damaged or even worse resulted in companies going bankrupt in the U.S. Another interesting fact is that current economic growth suppressed the previous record which dates back to 2001. There are several factors which makes this economic growth to stand out from other such expansions.
First of all, let’s have a look at the unemployment rate in 2009 and 2019. Ten years ago, this rate reached 10% in October 2009. The unemployment rate in less than ten years in July 2019 is 3.6%, which is one of the lowest in modern history. Another number worth mentioning is the inflation rate, which is below the Federal Reserve’s 2% percent target and remained at that level most of the time in the last ten years.
The difference between the e-conomic expansion, which is happening in the U.S and the previous one, which started in the 1990s is the average economic growth rate. During the last decade of the 20th-century economic growth rate was 3.6% whereas the current growth rate is 2.3%, which is also a good result.
U.S stock market is a clear winner in this situation. For example, the S&P 500 index rose by more than 220% since June of 2009. Dow Jones Industrial Average increased by 215%, and the Nasdaq Composite Index rose by 340%. Based on the data from Monday’s session.
The other side of the economic expansion
A lot of different groups benefited from the continuous economic growth ranging from unemployed to the wealthiest Americans. A number of jobs created during the economic expansion are impressive, twenty- one million jobs since 2009. Many people who became unemployed during the financial crisis benefited from jobs created after the recession. However, it does not mean that these jobs solved all of the problems. Most of these new jobs are in the service sector, and salaries are not as high as in the manufacturing industry. It is a problem because manufacturing jobs which either disappeared or companies moved their factories used to pay more than the average salary in the service sector. Unfortunately, wage growth can’t keep pace with the unemployment rate. Thus it is harder to decrease the number of people living in poverty.
Another side of the economic expansion is the sharp contrast in the number of superrich and people living in poverty. The number of billionaires in the U.S. increased more than twice from 267 in 2008 to 607 in 2018. Whereas the number of people living on food stamps is more than 39 million. This data is alarming because that number was lower by 40% in 2008.
To sum up, the U.S. economic expansion in modern history has its advantages and disadvantages. According to the Federal Reserve economy will increase by 2.1% in 2019. It is important to remember that during the financial crisis, preceding this expansion a lot of companies went bankrupt. This fact makes the current economic expansion even more precious. The U.S. economy managed to overcome the most significant recession since the great depression.