“Today’s program looks at an economic update. Mike, we are now through the first quarter of 2017. Which means 25 percent of the year is now gone. Coming into the year, there were many expectations for the economy. Particularly, in terms of increasing economic growth. Where do we stand after the first three months of the year?”
“Well, and of course we’re actually into month five, but a lot of this data has yet to come because of the lag. So we’re going to talk about the numbers for the first three months of the year, and I think, in general, what I’d say is it’s a continuation of where we were in 2016. We really have not seen any big movement in the overall economic numbers.”
“For example, GDP growth, gross domestic product, the biggest and widest measure of our economy, increased only .7 percent on an annual basis in the first economy. That’s actually lower than it was increasing at the end of 2016. Interest rates and inflation, after going up a little bit in the end of 2016, have actually pulled back a little bit. So we’re moving at about the same pace in terms of interest rates and inflation.”
“I think the best news is that the job market continues to expand. In fact, there’s been a little bit of a bump upward in terms of job creation, and the unemployment rate is falling. Of course that doesn’t account for folks who’ve given up looking for work. So we still have a lot of issues there.”
“And then I think another big change in the stock market. We got a big run up in the stock market at the end of 2016, the very beginning of 2017. That seems to have leveled off however. I think that run up was caused by an expectation that the economy would accelerate. We haven’t seen that acceleration so I think that investors are now sitting back and waiting to see what’s going to happen in terms of the various Trump administration economic policies.”
“So I think bottom line here, until we get some of those policies passed through Congress, if they get passed, but until we do we’re probably going to see the economy moving ahead just as it was at the same pace in 2016.”
Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic outlook and public policy.