Economic & Real Estate Report – 3Q 2017
In the face of disruptive hurricanes and political turmoil, the initial estimate of GDP growth indicated that the U.S. economy remained resilient during 3Q17. Despite the first monthly employment decline since 2010 (reported in September), the labor market has remained strong, characterized by steady job gains and low unemployment. Driven in large part by strong corporate earnings and, to a lesser degree, President Trump’s anticipated tax reform, leading stock indices continued to reach new highs and set multiple records during 3Q17.
High confidence levels, supported by increased real disposable income, continued to drive steady consumer spending. Inflation, which had weakened earlier in the year, escalated this summer, though it still remains below the Federal Reserve’s (Fed’s) 2.0% target. Of concern, existing home sales continue to be negatively impacted by restrained homebuilding and limited inventory.
As the U.S. economic cycle enters an advanced stage, global economic growth has accelerated in leading economies such as Europe, Brazil and China, which has weakened the dollar. This weakness has helped to strengthen the U.S. manufacturing sector and increase U.S. exports. Driven by strong business investment, factory, industrial and durable goods orders all increased in September.