United States

The Real Economy: Volume 59

Uncertainty is becoming a drag on the U.S. economy


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After a decade of the longest expansion in American history, the economy is entering a fraught new phase, one characterized by whipsaw changes in trade policy and a highly volatile geopolitical environment. The result is a chill on both capital investment and household spending as businesses and consumers search for stability. Call it the “Age of Anxiety.”

The shift is being driven by what we call the uncertainty tax: When businesses are confronted with continuing radical shifts in trade policy, they become reluctant to invest in equipment, software and intellectual property—the kind of spending that will enhance productivity in the long term. That drop-off inevitably leads to greater volatility in asset prices, along with declines in consumption, and ultimately, employment. The result is the U.S economy is caught in a trap, one entirely of its own making. The conundrum is occurring just as the positive effects of the tax cuts of 2017 and higher government spending begin to wear off.

In this issue of The Real Economy, we explore the toll of this mounting uncertainty on the economy and middle market businesses. In addition, we examine the Canadian election impact and why fiscal policy will become increasingly important in the short-term. In our Industry Spotlight and Trend Watch features we look at how retailers and other businesses should prepare for the ups and downs of consumer confidence. Download the full issue.


The uncertainty tax takes its toll on the U.S. economy

The uncertainty tax takes its toll on the U.S. economy

Through data insights, we explore the impact of a mounting uncertainty tax on the economy as well as on middle market businesses.

Middle market trend watch: Tracking consumer confidence

Middle market trend watch: Tracking consumer confidence

How are consumers viewing current economic conditions and how are buying habits and preferences affected? We examined the latest data.

Industry Outlook: Retail

Industry Outlook: Retail

How can middle market retailers address shifting consumer confidence? One way is to sharpen discounting and promotional strategies.


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