United States

Abstract

The U.S. is in its third longest expansion since 1850, job growth has been persistently strong, inflation is subdued, and the economy is effectively at full employment. However, like many other advanced economies, the U.S. is confronting secular shifts on multiple fronts. These include technological change that is reshaping labor and product markets, low productivity growth, rising skills premia, and an aging population. Even with high per capita income and one of the most flexible, competitive, and innovative economies in the world, the U.S. model appears to be having difficulties adapting to these changes. Most critically, relative to historical performance, growth has been too low and too unequal. The challenge for the U.S. administration is to realign policies to raise productivity and labor force participation, reduce poverty and income polarization, and help restore the economy’s adaptability and dynamism.