July 5, 2016

The U.S. Economy: A Post-Brexit Assessment

Bruce Yandle

Distinguished Adjunct Fellow
Summary

Given what we know now about Brexit and its possible repair, what would have been a ho-hum year for the nation, with wide variation across states and regions, will be even slower. And 2017 will look a lot like it. Welcome to the slow lane.

Contact us
To speak with a scholar or learn more on this topic, visit our contact page.

Near-zero GDP growth. Strong dollar. Weak exports. Factory recession. Federal Reserve hesitancy. Low inflation and low interest rates. Solid consumer spending. Accelerating construction. Rising home sales. China turning the corner? These keywords were seen frequently in news stories prior to the world-startling June 24 Brexit vote. They pretty well described the 2016 midyear economy then … prior to the Brexit. But this is now, and the world has changed. Or has it?

The words reflect facts.

To answer the question, we must go back a bit. More than a year ago, in an effort to add some steam to the EU economy, the European central bank accelerated its euro printing press. They started printing money faster than we do, and that's saying a lot. Ergo, the dollar got stronger and U.S. exports fell. Already throttled by growing regulation, declining productivity and slow population growth, the U.S. economy stumbled, and a U.S. manufacturing recession kicked into gear.

Continue reading