Life expectancy declining. The United States is having the longest phase of expansion in its history. But this boom could be better shared. A revealing indicator, life expectancy, is declining.
In appearance, everything is fine. In the United States, the economy will record a decade-long expansion phase in mid-2019, the longest period in American history, the IMF points out. Unemployment is at its lowest level since the 1960s. Growth is driven by fiscal measures and favorable financial conditions. Real wages are rising and productivity is starting to rise while inflationary pressures remain “remarkably moderate,” says the International Monetary Fund (IMF) in its so-called “Article 4” report on the US economy, released on Tuesday.
The IMF screens the state of economic health of each of its 189 member countries throughout the year.
Yet the situation is far from euphoric. The prosperity is poorly distributed in the US. For example US Life expectancy, which reaches 78 years, is even declining and the United States is ranked 35th in the world. Poverty has decreased, but it remains stronger than in other developed countries. And social mobility has fallen sharply.
These indicators are worrisome, the IMF says, calling on the US authorities to consider “taking care of growing income inequality and improving social conditions as a priority”.
On the macroeconomic level, the body in charge of the global economic equilibrium is no more serene. Public debt is on an untenable path, and in the medium term its weight might burden the American economy. Starting with a sudden change in financial conditions or the worsening of the current trade war, the organization points out.
The international organization plans for this year a growth of 2.6%, against more than 3% according to the White House, after 2.9% in 2018. In 2020, the IMF estimates that growth should stall to 1,9%.
The IMF is therefore giving advice to US authorities. The organization suggested an increase in indirect taxes that would give them more room for maneuver and would lower the budget deficit and curb indebtedness.
On the trade front, as negotiations with China get bogged down, the Fund “encourages the administration to work constructively and in cooperation with its partners to find solutions to trade distortions”.