The strong dollar could be slowing US growth.

The United States economy has been able to add more than 1.5 million jobs during the last six months and because of this the employment rate in U.S. was able to drop to 5.4% from 5.8% in November. However the recent gains in the economy have not necessarily been able to make their way towards the middle class. According to the former Chief Economic Adviser of Vice President Joe Biden, Jared Bernstein, this trend could continue in the near future because of at least one important factor.

“The one headwind is that the strong dollar really does make it tougher for our manufacturers to export,” said Bernstein. “It raises the cost of our goods in export markets and lowers the cost of other competitors’ goods in our markets and so the trade deficit could end up being a bigger drag on growth than it is right now.” The reality is that the trade deficit has jumped to 51.4 billion dollars during March, and this is the highest reach since October of 2008. The strong dollar has contributed to increasing the gap by hurting the exports of the United States. When asked how the economic situation will look like on Election Day in 2016 Bernstein stated, “The macro economy will be solid, whether or not it will reach folks is another question.” The matter of income inequality has gained so much hype that even the White House contenders of the Republican Party have started to force talks on this hot issue. The increase in interest could be a positive thing and contribute to resolving the problem sooner. Even though the macro economy is starting to show signs of progress there is one key area which continues to fall behind: income. Since there are more people returning to jobs in the last year and a half income was able to rise by over 3%, however the fact still remains that the real income is still 3% lower than where it was during 2007 before the economic crisis.

Now that both of the parties are discussing income many people are asking questions about what can be done to improve the situation. Bernstein states that wages are just one part of the whole problem and that rising minimum wages will help those on the bottom; however he thinks that investing in infrastructure using fiscal policies could help the macro side, bringing more jobs and improving productivity.