The new normal of 2% US growth has just been downgraded by economists at JPMorgan. They say the new, new normal is long-run US growth of 1.75%.
The “U.S. future isn’t what it used to be,” said Michael Feroli, chief U.S. economist at JPMorgan in New York. Declining productivity gains and a slower expansion of the labor force “should limit the U.S. average growth pace” in the long run.
Feroli cites an aging workforce and lower productivity.
The current consensus for 2013 is 1.60% and 2.70% for 2014. With the Fed basically out of bullets and Congress utterly dysfunctional it’s growing difficult to see how 2014 will be much better than this year.
