12/22/2016
As we enter 2017, the U.S. economy is amazingly in the eighth year of economic expansion, making it the fourth longest since 1900.
However, so far economic growth has averaged just 2.1% per year, the slowest of all the post-World War II expansions. While economic growth has been mediocre, very weak gains in productivity have ensured that, even at this pace, it has steadily taken up the slack in the U.S. labor market, with the unemployment rate falling from a post-recession peak of 10.0% to 4.9% by October 2016.
In short, this American economic expansion has been moving slowly but steadily.
There are signs the expansion may pick up the pace in 2017, with the potential to boost corporate earnings and confidence but that will also raise inflation and interest rates.
At this time it looks like we have a modest acceleration. However, there are risks if demand growth outpaces the growth in supply.
