The official line (I think) is that GDP growth is due: 2 percent to labor force growth (new entries) 2 percent productivity growth; one percent increased labor force participation (of existing LF).
If I add radical views and Wall Street theories, we get the following list: 1. The stock market boom and the wealth effect on C. 2. The growth of csr and mortgage credit and debt. US as net foreign debtor means that a large share of csr and mortgage credit is inflation-free, because of foreign lending, in turn, partly related to the US current account deficit. Lower interest rates, perhaps partly due to foreign lending, but mainly due to Fed policy in the 1990s, stimulates more C. Mortgage credit has been eased. In my day, five percent down on a house, now common, would have been seen as reckless, a recipe for personal and financial system ruin. The most costly csr durable, cars, well, you can drive a Lexus for c. $300 plus a month on a lease deal. Csr soft goods: most come from Asia, LA, North Africa, etc., at low prices, releasing income to spend more on other csr junk. Csr electronics: prices falling (if you adjust for quality improvements). And don't forget a decline through the 1990s, reversed for the time being, of the cost of "the elements of constant and variable capital," fuel oil, gas, copper, etc., etc. This also releases income to buy wide screen TVs, sports equipment, etc.
3. A decline in unemployment with a small rise in labor force participation and a flood of young first-time workers; then the rise in money wages (even real wages, but less so) in the past two years, are also factors. As is the development of the two-tier laboring class, high tech engineers, programmers, financial advisors, etc., etc., all associated with globalization (at least in these parts), which pumps purchasing power into the richest one-third of the work force (while the poorest one-third buy cheap underwear, etc., from China). Here is the theme of the hollowing out of the middle class. Relatedly, the shift in labor force and incomes from productive capital to financial, insurance, and real estate: here most workers are salaried, and salaried, workers, cet. par., borrow relatively more and have a relatively high MPC. The new supply of financial-type workers creates a new demand for financial services and credit, as it were.
There are other "factors" I'm sure, that I've forgotten, as I'm not looking at any notes writing this. Oh yes, the surprising increase in labor productivity in the last two years or so.
I'm interested in how the rise in C (the American csr as savior of world economy) is dialectically related to the relative decline in X. A start might be to relate the growth of X (and foreign lending generally, plus FDI, which is usually just takeover investment) to a new globalized class structure, in which lots of consuming power is allocated to high tech industry (which exported 50% of its high tech equip output a couple of years ago), hence is a new source of upscale mkt purchasing power; at the other end of the income scale, the flood of cheap imports of csr soft goods and csr electronics, which frees some scarce purchasing power to buy moderately priced cars and furniture, and the like. The "other end" being now, increasingly in the 1990s, I think, two or three income families, as labor force participation of women has gone from less part-time and more full-time work.
Clearly we need not just an economics, a macro-economics, but also a political economy, and also a sociology/anthropology of changes in class structure and occupation hierarchies, and the like, plus an analysis of movements of global capital as a whole, to fully or really explain why X play a less important role today, while C has practically taken over the national income statistics.
Pardon my meandering, it's one of those days.
Jim O'Connor