The Economic Perspective: “Is 2% as Good as It Gets?”

I’m Mary Walden, with economist MW, welcoming you to the economic perspective.  Today’s program asks if 2% is as good as it gets?  Mike, last year the economy grew at almost a 3% rate, which is very close to the annual average since World War II.  This year we will probably be lucky to see 2% growth.  Is there cause for concern?

Mike: Summary Answer

  • Some say growth rate will pick up if trade deals are made
  • Others say last year was an aberration caused by the 2017 tax cuts
  • Still others say 2% is the new normal
  • Reason – a big factor behind economic growth is population and worker growth
  • Both have slowed in recent decades, as they have worldwide
  • If continues, slower total growth will result
  • But if look at per capita GDP growth rate, still a slowdown in last 20 years
  • So still an issue – maybe aging, education?
  • I’m MW

Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.