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The Jekyll and Hyde Economy

The Jekyll and Hyde Economy presents two contrasting sides about the U.S. economy. Dr. Jekyll side is optimistic of the outlook and points out four aspects of the economy that are re-assuring. The four aspects are a strong labor market with a low unemployment rate of 3.5%, low wage earners are the one getting biggest salary raises, housing market is finally picking up, and the Federal Reserve is lowering interest rates to stimulate the economy.

Mr. Hyde side is pessimistic about the economy because the manufacturing sector is already in a decline, the global economy is expected to slow down in growth, the trade war between the U.S., and China is leading to job losses.The Jekyll and Hyde Economy

The side of the story that I buy more is the optimistic side of Dr. Jekyll’s side. This is because it more convincing especially on a robust labor market. Despite the fact that the manufacturing sector is in a decline resulting to job losses in the sector, all is not lost as more jobs are being created in other sectors thus covering up for the losses and lowering the unemployment rate to levels it once touched more than 50 years ago (May of 1969). Second, the effects of a trade war with China are being exaggerated because the Federal Reserve is in the process of lowering interest rates to stimulate the economy so that it can ahead of any potential slow-downs arising out of stalemate. Third, with low earners being the ones getting the biggest salary raises, the economy is poised to reap big as these low earners use the additional funds to purchase more, save more, invest more. Therefore, Dr. Jekyll’s side is more compelling in its analysis of the U.S. economy.