US Economy Growing In 3rd Quarter How Will The New Consumer Confidence Impact Home Buyers

US Economy Growing In 3rd Quarter How Will The New Consumer Confidence Impact Home Buyers

After 8 years of recovery & stable economic growth. We have a new administration and the promise of continued growth. However,the new administration is off to a rocky start. Non-the-less, markets have reacted favorably. Will the financial markets and the Trump Administration continue their story book  honeymoon?  The answer depends on the timeing of tax cuts, and the rollback of economic restraints that have lead to the divestment in the US Economy by major US based companies. Regardless of one's personal opinion, the reality is that as Realtors we depend on Consumer Confidence. Consumer Confidence is a by product of a stable and growing economy. So with regard to, political view points, be open to change, but steadfast in your opinions. Agree to disagree, but find information and educate yourself as citizen of the greatest country on earth. Understand, that as  Realtors we have a common goal,  A  Stable & Growing Economy.

The following article was released by the :

THE ASSOCIATED PRESS 

The United States economy in the third quarter grew at the fastest pace in two years, according to a revised report that showed stronger consumer spending than first estimated.

The gross domestic product, the country’s total output of goods and services, expanded at an annual rate of 3.2 percent in the July-September period, the Commerce Department reported on Tuesday. That is up from a previous estimate of 2.9 percent.

The revision was significantly better than the meager gains of 0.8 percent in the first quarter and 1.4 percent in the second, when the economy was being held back by a strong dollar and weak business investment.

The 3.2 percent increase was expected to be the best showing for the year. Economists say they believe growth has slowed to around 2 percent in the current quarter. At the moment, they are forecasting growth of 2 to 2.5 percent for 2017.

Real Economic Growth 

Annual rate of change in the gross domestic product, based on quarterly figures adjusted for inflation and seasonal fluctuations. 

To

From

 

3rd quarter revised

Change at annual rate

+3.2%

+2.9

+6

%

+4

+2

0

–2

’13

’14

’15

’16

Source: Commerce Department  By The New York Times 

But analysts caution that the outlook for next year could shift significantly based on policy changes — like tax cuts and higher trade tariffs — that President-elect Donald J. Trump has promised.

“Uncertainty regarding our forecasts is higher than usual, given expected fiscal and trade policy changes under the new administration,” said Blerina Uruci, a Barclays economist.

The latest look at G.D.P., the second of three estimates from the government, showed that consumer spending grew at a rate of 2.8 percent in the third quarter, better than the 2.1 percent first estimated. The newfound strength reflected more spending than initially thought in such areas as auto purchases and utility bills. Still, consumer spending, which accounts for 70 percent of economic activity, slowed from a gain of 4.3 percent in the second quarter.

Other areas of strength were in export sales, which grew at a 10.1 percent rate. Although the figure partly reflected a temporary surge in exports of soybeans, economists are hopeful that exports will show further gains in the coming months. Earlier in the year, American manufacturers were battered by a strong dollar, which made their goods more expensive on overseas markets.

For the year, the economy was expected to grow a modest 1.5 percent, down from 2.6 percent in 2015, which was the best performance in the seven years since the recession ended in mid-2009.

Consumer Confidence 

Index measuring attitudes toward the economy, 1985=100. 

108

102

96

90

’15

’16

Source: The Conference Board  By The New York Times 

While G.D.P. growth is expected to slow, analysts still expect the Federal Reserve to raise its benchmark interest rate at its meeting in December. It would be the first rate increase since the Fed raised its benchmark rate by a quarter-point a year ago.

During the recent campaign, Mr. Trump deplored what he saw as a sluggish economic recovery under President Obama; economic growth has averaged around 2 percent since the end of the recession. Mr. Trump said he wanted to set a national goal of reaching 4 percent growth during his administration.

Most economists think that may be overly optimistic, given tepid productivity growth and the mass retirement of baby boomers, which they say would weaken growth in the labor market.

Some economists have said they will increase their economic growth forecasts if Mr. Trump is successful in getting Congress to pass his package of tax cuts and increased spending in such areas as military

and infrastructure projects. But their current estimates put growth at around 2.5 percent over the next two years, an improvement from their current forecast of growth next year of around 2 percent, but well below Mr. Trump’s 4 percent target.

In summation, you don't have to kill the Cow to drink the milk...


Salvatore Defrisco Headshot
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Phone: 561-644-0052
Dated: February 14th 2017
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