Change in Economic Growth Leadership in Early 2017

In this report we discuss three important areas of the economy that have received a great deal of attention recently, namely: 

1. Key indicators of economic growth and inflation indicate mixed performance in the first half of the year. However, signs of a potential pick-up in activity in the second half of 2017 have emerged. While overall GDP growth will likely be moderate, the expansion that began in 2009 should continue. 
2. Consumers have slowed spending somewhat in the first half of the year. Is this a sign of weakness, or is the consumer essentially healthy enough to support continued economic expansion? We address this question and others in the “State of the Consumer.” The stability of consumer behavior in many ways may surprise you. 
3. The Federal Reserve has been raising policy interest rates and has disclosed a plan to normalize its large balance sheet over time. What are the newest monetary policy developments? 

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