As a new decade dawns, some -- but not all -- of the dark clouds hanging over the U.S. economy have cleared.

If anything, 2019 was a year on the edge: It started with a government shutdown, then fears of recession dominated for months as the trade war with China intensified. That battle hurt business investment and threatened the economic expansion, which nevertheless became the country’s longest on record at midyear -- thanks to nonplussed Americans who kept on spending.

The strength was fueled by job gains that unexpectedly picked up steam late in the year, bucking forecasts for a slowdown. Downside risks have eased somewhat as the Federal Reserve lowered interest rates three times, U.S.-China tensions cooled and the U.K. election removed some of the Brexit uncertainty that’s haunted the global economy.

It doesn’t necessarily mean growth will enjoy a resurgence, though. Economists still expect a slowdown to about 1.8% for gross domestic product growth in 2020, which is around what most analysts see as the long-run potential rate but well short of the 3% that President Donald Trump pledged to achieve.

In addition, the trade war with China is far from over, corporate debt is piling up, global growth remains sluggish and Boeing Co.’s production halt on the troubled 737 Max jet will ripple through factories.

Here are five key trends in the U.S. economy to watch in 2020:

Labor Step-Down
The job market outperformed projections at the tail end of the year, with unemployment matching a half-century low and wages picking up -- particularly among the average, non-supervisory worker where gains are approaching 4%. A strong payroll gain of 266,000 in November was enough to undermine projections that things were shifting into lower gear.

That narrative could weaken a bit with payroll revisions due in February that will make the past look less shiny. And analysts reckon that the downshift will still come in 2020, with average monthly job gains slipping in the third quarter, as the pool of available workers shrinks further.

That suggests 2020 will be the year when the Phillips Curve is really put to the test: Will wage gains accelerate and finally push inflation higher?

Consumer Engine
Even if it cools a bit, the labor market alone is likely to continue sustaining spending on goods and services -- the economy’s lifeblood -- as well as in housing.

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