WASHINGTON (Pakistan Point News / Sputnik - 14th November, 2019) Sluggish external growth and trade developments are expected to weigh on US exports and manufacturing as the United States heads for a record eleventh year of growth, Federal Reserve Chairman Jay Powell said in a congressional testimony on Wednesday.
"The US economy is now in the eleventh year of this expansion, and the baseline outlook remains favorable," Powell told the Joint Economic Committee. "But it also reflects weakness in business investment, which is being restrained by sluggish growth abroad and trade developments."
Economists have expressed concerns that the ongoing US-China trade war has been one of the external pressure factors on US growth. Beijing and Washington are engaged in negotiations to end the trade war and have said they are inching toward reaching a deal.
Powell pointed out that the GDP expansion had continued at 2.5 percent in the first half of this year, maintaining 2018 levels, but it has slowed to 1.9 percent in the third quarter due to the transitory effect of an automobile workers' strike at General Motors.
"These factors have also weighed on exports and manufacturing this year. In contrast, household consumption has continued to rise solidly, supported by a healthy job market, rising incomes, and favorable levels of consumer confidence," Powell said.
Reflecting the decline in mortgage rates since late 2018, residential investment also turned up in the third quarter following an extended period of weakness, Powell added.
