Growth has undoubtedly slowed in 2019, but the proverbial effects from global trade tensions were not as pronounced in the U.S. as some of the other developed economies. Much of the strength in the U.S. economy has been delivered from solid consumer spending and heading into 2020 the outcome isn’t likely to be much different. U.S. GDP is poised to end 2019 slightly above 2%, and given the solid economic backdrop, particularly with the health of the labor market, we are expecting 2020 to be fairly similar as the economy extends the expansion we are currently in. The narrative for most of 2019 was focused on trade and the slowing of global growth as traditional supply chains were disrupted and uncertainty weighed on business investment. Now that trade tensions have begun to ease and manufacturing PMIs have turned the corner, a gradual uptick in global growth could support growth domestically. However, downside risks still remain with regards to trade and geopolitics. On balance, we expect growth in the U.S. economy to continue around a trend pace of 2%, but we remain cognizant of the late-cycle risks that pose a threat to the prolonged expansion.
Products are issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. In New York, products are issued by Allianz Life Insurance Company of New York, 1633 Broadway, 42nd Floor, New York, NY 10019-7585. Variable products are distributed by their affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297.