Summary and 2018 Projections.
1. 2017 was the eighth year of economic expansion, the third longest since WWII. GDP closed the year growing by 2.5%, nearly a 25% stronger than growth rate than we projected at the beginning of the year.
2. The economy added 174,000 jobs per month driving unemployment down to 4.4%. Although the monthly job creation numbers were lower than in 2016, one could argue that we are near full employment as it is hard to find capable workers to fill a newly created job.
3. The existing house market was healthy in 2017, continuing to be characterized as a market with less product to sell than buyers who want to buy. Unit sales of existing homes reached 5.4-5.5 million, a healthy number but less than the unsustainable peak of 7 million units reached in 2005.
4. The U.S. stock market rose by almost 25% in 2017, its ninth consecutive bull year.
5. These are all achievements that seemed unachievable in 2008 when we were in the first year of a deep residential recession. Yet, they are happening at the same time the country is in the first year of a new presidency.
6. There is no impending issue or trend, short of a major government scandal or an act of terrorism on U.S. soil, that should impede our ability to, at a minimum, sustain the achievements we met in 2017. GPD should grow in 2018 at a 2-3% rate. The size of the range is driven by the unknown favorable effects the triggered by the tax reform. Unemployment is expected to hover around 4.1%.
7. The FED is suggesting there will be as many as three increase to target range for the Fed Funds rate.
Click here to download a full copy of the 2017 Report.