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Economic Update: March 2, 2017

Economic Update

 

News flash—the US economy is actually doing quite well.

 

We’re happy to report that the economy is doing quite well.

 

The Dow surged past 21,000, setting a new record high yesterday. Analysts attribute the market’s fastest 1,000-point rise in history to strong economic data, paired with the new Administration’s promise of an upcoming tax reform announcement.

 
And here is some more (economic) good news…

  • The Manufacturing index for January reported its highest level since 1984.
  • A measure of small-business sentiment in January maintained its post-election surge as business owners remained optimistic about better economic prospects.
  • The most recent news release of the National Association of Realtors reports the National Median price for a home increased 5.2%.
  • Consumer spending has increased considerably. In fact, the last reading represented the largest increase since February 2013. Additionally, January Retail Sales rose 0.4% over the 0.1% expected.
  • The unemployment rate for January was 4.8%, as weekly Initial Jobless Claims hover near lows last seen in the early 1970s.

 

Make no mistake, this is all good economic news. Interest rates remain at historic lows, but we have every reason to believe they will soon move higher. Fed Chair Yellen confirmed as much when she reported to Congress in mid-February that the Fed remains on track to increase interest rates as many as three times this year. San Francisco Fed president John Williams said, “In my view, a rate increase is very much on the table,” at the March 14-15 meeting. We also know that, similar to the way a rising tide lifts all boats, so too does the real estate market when the economy improves.

 

Of course, there could be some sort of surprise or geopolitical event that could serve to disrupt this economic progress, but it would have to be a substantial one in order to bring this market to a halt, or even hobble it. But for now, the economy just keeps on keeping on.