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U.S. Economic Outlook–2019 in review and early 2020 developments

The U.S. economy grew 2.3% in 2019; a recession is expected in 2020.

23 April 2020|Briefing note
  1. The record long U.S. economic expansion will end this year, as a result of the COVID-19 pandemic. In 2019, the U.S. economy grew 2.3% . On average, market projections point to a decline of over 3% in 2020, a bigger contraction than in 2009.
  1. The U.S. economy added 2.1 million jobs in 2019. It was the tenth consecutive year of job growth since the financial crisis. The unemployment rate finished the year at a historic low of 3.5%, the lowest level in 50 years (since 1969). However, 701,000 jobs were eliminated in March 2020, and the unemployment rate jumped to 4.4%, bringing the U.S. longest period of job creation to an end.
  2. After the previous three-and-a-half years of normalization of interest rates, the Federal Reserve reversed the direction of its policy in 2019. At the meetings in July, September and October of 2019, the target range for the fed funds rate was cut by 0.25% each time. In March 2020, in response to the coronavirus crisis, the Fed cut interest rates back to the zero lower bound.
  3. This report also looks at the U.S. policy response to the COVID-19 pandemic. The increase in fiscal spending and loans in the U.S. this year alone will reach more than 10% of GDP. The Fed’s total balance sheet size increased by more than half a trillion dollars in a single week.

For a complete and detailed analysis see the PDF attachment with the full document.