The U.S. economic expansion continues to move in stride with a generally favorable outlook. In the third and final reading, Q2 2017 GDP came in at 3.1% q-o-q annualized. That’s quite impressive, but most economists do not think this pace of growth is sustainable. Both the manufacturing and service sectors, per the ISM manufacturing and non-manufacturing indices, have displayed strong performance, with the manufacturing index at its highest level in over six years. Additionally, there has been a pronounced pickup in business investment and exports, supported by stronger energy activity, an improved global backdrop and a weaker U.S. dollar. Consumer spending has been robust recently, despite the fall in August. However, with spending increasing faster than wage growth, retail sales may stall going forward if wage gains fail to accelerate. While the near-term outlook for the economy is fairly positive, uncertainly is plentiful. On the upside, policy stimulus from the administration and Congress, be it from reworking the tax codes or infrastructure spending, could provide a boost in the coming quarters. Conversely, a confidence-shattering escalation of tensions with North Korea, as well as anti-immigrant and anti-trade legislation, could sap U.S. economic momentum.
Source : CBRE Global Investors