An economic analyst advises citizens to look at the possible outcomes of prolonged growth, as the United States economy inches towards the longest growth period on record.
One-hundred-and-eleven months have passed since the last United States recession. The increasing movement equates to the second-longest growth period for the United States economy. However, an economic analyst is not too hopeful about the story’s end. Bob Young, president of Agricultural Prospects, says it is time to think about what happens after persistent growth.
“At this stage of the game, the economy is ticking reasonably well,” Young said. “We have very low unemployment numbers, inflation is not really much of a factor yet and (there are) some wage growth numbers to talk about. The concern is that the previous record for economic growth was 120. We’re now sitting at 111 months.”
Young does not see an economic slowdown on the near horizon. However, he believes it could become a topic of concern within the next year.
“I think think we’re going to talk about that for several months. But, nine-twelve months from now wouldn’t surprise me, for us to talk about economic slowing,” Young said. “I think the economy is very vulnerable to policy actions. I don’t think we’ve fully understand all the implications of all the trade trouble we’ve got going on.”
Young encourages farmers to pay close attention to interest rate volatility in the meantime.
“We’re going to talk about the Federal Reserve doing some interest rates rises, at least a couple times yet this year. The question then becomes, ‘What do the market-driven interest rates do as the interest rate rise occurs?’ The downside would be that the long-term rates don’t follow the short-term rate increases, up, and we talk about an inversion in the yield curve. When that happens, we almost always end up, within a few months, talking about a downturn in the general economy,” Young said.
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