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Community

Fed Reports Benefits of U.S. ‘Tortoise’ Economy

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America’s $20 trillion economy—or Gross Domestic Product (GDP)—grew at a rate of only 2.3% in 2019, but 2.1 million new jobs were created, the nation’s unemployment rate fell historically low (3.5%) and prices for oil and natural gas remained well below norms.

That was among the financial data shared by William A. Strauss, Senior Economist and Economic Advisor in the Economic Research Department at the Federal Reserve Bank of Chicago, during the 18 th Annual Multi-Chamber Economic Outlook Luncheon on February 7.

Since the end of the “Great Recession”—which ran from December of 2007 through June of 2009—America’s economy has generated average GDP growth of 2.3% in 2019 (a growth span “unprecedented” since the end of World War II), behind only China (6.1%) and India (5.4%).

With labor force growth and productivity gains relatively static, the Fed forecasts GDP growth at 1.8% to 2.0% for 2020, 2021 and 2022.

U.S. manufacturing and labor took a dip in 2019, with the Midwest economy feeling the pinch despite Illinois’ John Deere and Caterpillar.   The extended tariff conflict with China and the renegotiation of the foreign trade agreement with Mexico and Canada (USMCA)—Illinois’ two largest trade partners—forced some manufacturers to scale back on their operations.

The auto industry sold 17 million vehicles in 2019, but only manufactured 16 million units. Light truck sales increased by 2.4% and now account for three-fourths of the market.

 The nation’s year-end unemployment rate dropped to lowest level since 1969, while the State of Illinois fell to 3.9%, including DuPage County’s low of 2.5%.

The Consumer Price Index (CPI) rose to 2.3% in 2019, still below historical norms.

The U.S. became a net exporter of energy for the first time in history, rivaling Saudi Arabia in crude oil and Russia in natural gas.