What midterm voting results tell us about the economy going forward
With this year’s election results out, we’re seeing what the economic effects will be on the 2018 and 2020 races.
While most analysts will be expecting the economy to continue on its upward trajectory, the midterm results are important because they may indicate whether it will continue or stall.
President Trump, while on the campaign trail, talked about getting the economy back on track. He was right: The economy is on track—in a good place right now—for a strong 2019 and 2020. The problem is, those gains were mostly on the surface. The economy in the end is a lot more complex than a handful of GDP figures over time.
While we can see some signs the economy was getting better, the data doesn’t really indicate that we’re on track to experience a strong recession.
What we have seen thus far is mostly that the economy is expanding (with much stronger growth than we’d have expected), while still being far from what it would need to be to put unemployment below 4 percent. The recent increase in the economy’s velocity, or speed, was good, but not great.
With that said, let’s dive into things a little more in-depth.
1. GDP growth will be less this time next year
After being up almost 3 percent in the last quarter of 2017, the economy is finally slowing down.
A report from the Bureau of Economic Analysis, released by the White House on Tuesday, showed that the GDP growth rate would slow to 2.4 percent in 2018. That’s still above the 2 percent growth rate that’s needed to get the unemployment rate below 4 percent.
It’s possible that the economy will keep growing next year, thanks to rising consumer and business confidence, and a growing military. But it is far from clear that we will have a strong economy in 2018.
2. Unemployment rates are likely to remain high, but could decline
Unemployment is a very complex thing. Many things can influence the unemployment rate, and they include whether the economy is growing rapidly—which brings us to the second element of the 2018 midterm results we are