The US job report shows the US economy is at a corner

The latest US job report shows the number of new jobs was 98000 which was under the Wall Street forecast, 180000 while the payroll growth also slowed down compared with the previous records. Such phenomenon shows the US economy is highly likely to operate at the full employment rate (it is not necessarily to be 0 unemployment rate as a completely full employment rate is not desirable to maximise workers' incentives to work hard). If the US economy wants further growth, it requires an increase in investment in both private and public sectors. The most direct and instant boost in investment comes from government investment, as government investment usually is less calculated while private investment often involves many different concerns of risk, returns, individual preferences and many other factors. In addition, private investment sometimes sees government investment as its guidance. Therefore, government investment in most cases moves first.

The US public debt level is very high, it is not surprising if we see an increase in the US public debt ceiling during Trump's four years' presidential period. Under such condition, the US government investment decision has to be made under much more calculation than previously. It has to target those sectors which have the best effectiveness. The US government can invest in infrastructures, this is a very safe option. Improving living standards and public transport can help to improve productivity. However, it is likely to generate enough tax returns from these problems to lower the US public debt level even in the long term. Of course, the US government can invest in some sectors which are possible to generate higher returns. However, such investment will be risky and is likely to be publicly unpopular, as these sectors are more likely to be private sectors. And it may not help the average people to increase their incomes. For example, during the Cold War, the US launched a space race with the USSR. The programme was actually cheaper than building so many nuclear warheads and intercontinental missiles. But building missiles and warheads could directly make the US population feel their military defence getting strong and their life should have become safer. On the other hands, the space race led to many innovations and inventions which we can use in our daily life, but such influence and consequence were not very obvious and some of the inventions and innovations were not meant to be used in the ways we now know. Such investment does not have very certain results and future returns.

Therefore, I think the type of the US government investment will decide the future US economy growth trend. If it is conservative, the potential of the US economy could be relatively more limited.