This article discusses the annualized economic growth of the first quarter of 2017 decreasing to .7%. Even though consumer and small business confidence has increased with the election of Trump, this decrease is not a big surprise. One reason it is not surprising is because most measures of actual economic activity have not increased. Additionally, economic growth typically decreases in the first quarter of the year. It will be interesting to see how the economy performs the rest of the year as Trump continues to implement different policies to grow manufacturing and coal industries.
The composition of growth has changed quite a bit. Motor vehicle sales have fallen quite a bit, and alone take half a percentage off of economic growth. Decreasing sales of durable goods such as cars is typically an indication of hesitant consumers. This could be due to political uncertainty recently. Fixed investments have grown 9.4% (annualized). This is very impressive, and it is estimated that the second quarter will be better for the economy.
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2 comments:
It was interesting to see him running away from critics to be with people who won't disagree with him as the economy immediately slowed down after his inauguration. I wonder if the growth will return with his tax plan, or if the cuts will really even benefit the economy as a whole.
The crackdown on immigration could be a possible cause on this decrease in economic growth as there has been serious political unrest regarding immigration which affects the economy.
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