slatten49 Loc: Lake Whitney, Texas

This, FYI, from my banker/stockbroker, in the mail today.....

A Time for Patience

From Anthony Chan, PhD, Chief Economist for J P Morgan Chase Bank

Summary

Beneath the political turmoil in Washington, D.C., the fundamentals of the U.S. economy remain stable as we continue on our path of slow but steady growth since the expansion began eight years ago. While first-quarter numbers were disappointing, this is consistent with the pattern of recent years: a weak first quarter followed by strength in the rest of the year. In fact, we forecast that U.S. growth over the full year will be faster than last year, and faster still in 2018. The economy should be strong enough to withstand the Federal Reserve's continued tightening of interest rates. This coupled with improving conditions in Europe and China means that 2017 is shaping up to be a promising year for the global economy.

Growth is coming

Don't be misled by the weak economic growth reported for the first quarter of 2017, which was just 1.4% on an annualized basis. In recent years, the first quarter's data has been consistently lower than the rest of the year's. Since 2010, first-quarter growth has averaged just 1.0% annualized, while the remaining three quarters averaged 2.5%.* No one is sure whether this is a quirk in the date or reflects actual seasonality in the economy. J.P. Morgan believes that 2017 will behave similarly. Our current forecast is that growth for the entire year will come in at 2.2%, a healthy improvement from last year's 1.6%, and improve even further to 2.5% in 2018.

This may disappoint some investors who expected the economy to surge as dramatically as the stock market did after last year's e******n. But these were never realistic expectations. The stock market's enthusiasm was driven by what economists call "soft data"...surveys of consumer and business confidence that show how people in the economy are feeling. Yes, some soft data has a real effect on the economy, because when people feel confident, they spend more money. But it takes time for that effect to show up in the "hard data"...statistics that reflect actual economic activity.

Source:
*Bureau of Economic Analysis