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Lee President Donald Trump 'unlikely' to usher in a new era of US growth 6/17/2017 9:47:50 PM
Lee
Lee
 
donald trump
Donald Trump

Beth Ann Bovino, US chief economist at S&P Global, said the world’s biggest economy was unlikely to enter a new era of economic  growth under the US president. 

The parent company of the leading ratings agency warned last year that many measures announced on the campaign trail would fail to materialize. 

 

 

She said a promised infrastructure spending spree would also be modest and fail to generate big gains for the economy

.Bovino said: “Promises are not policies and the Trump administration is going to face the reality of a slow legislative process, despite the fact that we have a majority of Republicans in Congress.” A big fiscal stimulus risked pushing up inflation and overheating the economy, which would lead to faster interest rate rises that could rein in growth.

She said: “It’s not hard when you look around and you see potholes on the street and bridges that have been closed because they could potentially collapse to see that we need an infrastructure revamp.

“But in terms of timing, it would have been better to do it a few years ago when the economy was much weaker, when a lot of construction workers were out of work and the unemployment rate was 25pc.

“These people needed a job then, which would have put money in their pockets and boosted demand. 

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The number of men in the US workforce has declined sharply. Source: FRED

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Participation rate (%)The number of men in the US workforce has declinedsharplySource: FREDUS male participation rateUS female participation rate19601980200020406080100Highcharts.com

Now the construction unemployment rate is around 6pc to 7pc and businesses are complaining that they can’t find the workers they need. This pushes up costs, as does higher interest rates.” - 17 JUNE 2017 •

Ms Bovino said there remained a 20pc to 25pc chance of a US recession over the next 12 months. She said “policy mistakes” by the White House such as trade barriers posed the biggest risk to the economy.

Lee

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