Jul 9 2017 38250 1

Dated: 07/09/2017

Views: 27



Although GDP growth slowed again in Q1, as has been the case for the past few years, the economic recovery that began in July 2009 remains intact. The poor performance of the US economy from January through March was almost expected as Q1 growth has been consistently weak in recent years, with the incoming employment, manufacturing, and service sector data all pointing to a modest economic pickup. GDP growth the rest of the year should average 2.50%, with growth in Q2 above 3.00% as the economy rebounds from a tough Q1. The combination of continued employment growth and an improving global economy suggest that 2017 will probably improve as it progresses.

Outside of agriculture which is very weak, mining which is struggling, and auto sales which are high but slowing, the rest of the economy is OK. The labor market continues to strengthen, and job creation, while down slightly from last year, remains surprisingly strong. At this rate, there will be little if any slack in the labor market 12 months from now.
As for housing, after a strong 2016, it is slowing, albeit slightly. Looking first at existing homes, a lack of inventory is severely constraining sales. Simply put, there are not enough homes for sale. Despite that, existing home sales should rise by 3% this year while home prices should rise by a strong 6% nationally, with house price appreciation of closer to 10% in the West.
Given this weak inflationary environment, expect the Fed to raise rates by one-quarter-of-one-percent this month and by an equal amount in September or December. 
In short, the economy continues to grow slowly. Short-term interest rates are likely to continue to rise gradually, and residential construction activity looks to continue to strengthen sluggishly. Most critically, continued job creation will keep consumer spending up, passage of key Republican legislation could boost growth late in the year, and the likelihood of a recession during the next six months is close to zero.
Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC. His daily 70 word economics and policy blog can be seen at www.econ70.com.   
To receive a list of local lender's with whom my clients have used,  give me a call at 810-588-8543. I'm happy to send that over to you. - Annette Hibbler, Keller Williams

Josh Murray

Josh Murray is an Associate Broker and Team Leader at Keller Williams- Top Michigan Realty Group, a firm that specializes in all aspects of Residential Real Estate in Metro Detroit. Josh Murray receiv....

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