Top USA Future Economic Trends

What Is the Future of the U.S. Economy?

USA
Ongoing uncertainty is slowing economic growth in the USA.. Photo by Chip Somodevilla/Getty Images

These are the top five trends that are most likely to affect the U.S. economy in the future. You won't hear about them in the news, but they are all backed by research. Keep them in mind, and you will be able to protect your financial future. That includes your job, your home, and your retirement savings.

1. Uncertainty Raises Business Costs - Increased economic uncertainty following the 2008 financial crisis forced businesses to change their planning process to cope.

They've been buffeted by an onslaught of unexpected changes to their business. That includes bankruptcies of key customers or suppliers, loss of bank loans, and decreasing demand. Congress only made things worse by creating the U.S. debt crisis in 2011, the fiscal cliff in 2012, and the government shutdown in 2013. 

Despite increasing optimism, many business leaders are still concerned about ongoing uncertainty. As a result, they are not as confident in their ability to predict the future. To cope, they've had to shift the whole way they do operational planning. An Adaptive Insights poll of more than 140 financial executives showed nearly half reforecast their entire business more than once a quarter. It's expensive and makes long-term expansion difficult. This uncertainty means they are holding onto more cash, and investing less in capital equipment and new employees.That means they aren't spending and hiring as they would in an average recovery.

2. Companies Switched to Freelance, Temporary, and Part-time Workers - Businesses are less likely to hire full-time workers for three reasons: 1) To keep overhead low, 2) To remain flexible in an uncertain environment and 3) To keep from paying higher health care benefits.

To thrive, workers must create multiple streams of income, and remain flexible themselves.

The best ways to do this? Try to find a way to make money from a hobby. Be realistic about your attractiveness in the job market, whether due to your age or your work history. Get new skills for a part-time job that could turn into something more. Be open-minded about what you can do to earn more money. Stay focused on turning your skills, assets and time into more cash. Be aware of economic trends, and take advantage of them. For more, see How to Thrive in a Freelance Economy.

3. Baby Boomers Won't Retire - A recent Prudential survey showed over half of those aged 45-75 are being forced to delay retirement because of the recession. Even those who can afford to retire will probably keep working in some capacity. Like the Great Depression, the Great Recession has left emotional scars, and a new willingness among many Baby Boomers to keep costs low and incomes high. That means the old idea of playing golf and truly retiring gives way to many forms of semi-retirement.

Unfortunately, this also means they won't get out of the way for the younger generation.

They must adapt by giving up the old "career track." Instead, younger workers are finding ways to earn a living that is rewarding and meaningful to them. They also take advantage of innovation in technology to create new jobs that don't exist today. For more, see Retirement Crisis: Why Boomers Won't Retire.

4. America Gradually Declines in Global Economic Power - Before the recession, the G-7, the leaders of the world's developed economies, set economic policy. The United States was "leader of the free world." In 2009, the G-20 took charge. That organization gives more clout to China, India, Brazil, and Russia. These countries survived the recession because they regulated their banks to avoid derivatives. Their stronger economies give them the leverage to demand more global economic power. They will get it. It's one more reason why the U.S. standard of living will continue to decline. Instead of being the world's only superpower, the United States will be a leader among many. 

5. The United States Will Have Another Major Crisis, But Won't Collapse - It seems the United States has an economic crisis every decade or so. That's because of the phases of the business cycle. For every boom, there is a resultant bust.

The 2008 financial crisis was so devastating that the economy has not yet recovered fully. Politicians have compounded the problem with uncertainty. Combine this with the speed of financial transactions, and the result is increased economic volatility. Gas and oil prices rise and fall, depending on investors' moods. That translates to either higher food costs or plummeting commodities prices. 

Gold prices hit an all-time high in 2011. The following year interest rates hit a 200-year low. The dollar rose 25% in 2014 and 2015. At the same time, oil prices fell to an eleven-year low. These extremes signaled new asset bubbles. That's the precursor to another economic crisis, possibly in 2020.

But a collapse will be avoided. There are too many protections in place to allow that to happen. To find out what they are, see U.S. Economic Collapse

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