The problem in the US economy

The US stock market is not performing very well and I am doubting if the longest bull market will continue its legend. In addition, US factory orders were reported to shrink by more than expected in July and the three consecutive months growth ended, according to Thomson Reuters survey. People blame the US current trade policy and the trade tension with other countries. In addition, although the Trump administration has issued several tax cuts for individuals as well as cooperation, people expect the economic growth of the third quarter is going to decline and the stimulation generated by the tax cuts will not last too long. The fear of the weakening US economy definitely affected the US stock market and has dragged down the market performance.

Besides the trade tension, there are several problems facing the US economy. The unstable political environment is a big negative factor. An unstable political environment means that the companies in the US are facing more uncertainty about the effects coming from the government, such as the interest rate changes, the tax rate changes and regulation changes. In addition, if the US president is impeached, then lots of attention and work will focus on the President impeachment rather than other issues, such as trade negotiation, economic growth and other economy-related topics. When less work is done on boosting and/or stabilizing the economic performance. the policies on the economic performance will not be made on time. Moreover, the economy of the rest of the world seems weakening. The US economy is not standing by itself, its companies and individuals are doing businesses with the individuals and cooperation from other countries. The factory orders decline shows the weak demand from other countries, and the weak demand is caused by other countries’ weak economic performances, which is likely to weaken the US economy as well.

To conclude, the US economy may be in a very good shape, its hidden danger is real and making influence on the economy right now. Investors and people need to be more aware of the increasing uncertainty and the downside risk of the US financial market as well as the US economy.