United States

The Real Economy: Volume 53

U.S. growth and the business cycle


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U.S. gross domestic product growth in the current business cycle peaked in mid-2018, bolstered by the 2017 Tax Cuts and Jobs Act and the U.S. federal budget agreement for fiscal year 2018. Following the tax reform, GDP reached 4.2 percent in June 2018 and is decelerating toward a long-term trend rate of 1.8 percent.

In our estimation, the economic impact of the tax cut peaked in October 2018 and is now fading. The budget agreement is still providing net support for overall economic activity, which is reflected in GDP in early 2019, bolstered by the public construction sector, which jumped 3.7 percent in February. However, unless a bipartisan budget agreement is reached  before the end of 2019, a $126 billion fiscal cliff awaits the U.S. economy in the 2020 fiscal year, and will begin acting as a drag on overall growth later in 2019.

In this issue of The Real Economy, we review leading indicators of economic activity as the United States heads into the late innings of this current business cycle. In addition, in our Industry Spotlight, we feature real estate and opportunity zones as well as health care and the rise of telemedicine. We also provide an assessment of wholesale gasoline futures and a GDP analysis on the heels of the first quarter release.


U.S. growth and the business cycle

U.S. growth and the business cycle

We assess leading economic indicators and business cycle in terms of the labor market and the consumer, manufacturing and financial sectors.

IRS offers further clarity in opportunity zone regulations

IRS offers further clarity in opportunity zone regulations

The new revenue guidance has cleared the way for businesses and investors to invest in opportunity zones and drive economic growth.


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