U.S. Heads for 3% Growth Trifecta on Spending, Investment Punch
- Consumers, companies drive expansion in nation’s GDP
- Maintaining pace of gains may prove challenging in 2018
IIF President Adams Calls U.S. Tax Cuts a Big Boost
The U.S. economy probably ended last year with the longest stretch of 3 percent-or-better growth since 2005. The $17 trillion question is, can it keep up this performance this late in the business cycle?
Solid consumer spending, accelerating business investment and a housing rebound combined to drive fourth-quarter demand in the world’s largest economy. Gross domestic product expanded at a 3 percent annualized rate after 3.2 percent in the third quarter and 3.1 percent in the previous period, according to the Bloomberg survey median ahead of Commerce Department data due Friday.
Tax cuts championed by President Donald Trump have fueled expectations of an extended boom in capital spending and buoyed household confidence. Maintaining economic growth of at least 3 percent, a goal of the president’s, is a bigger challenge. One reason is household consumption -- which accounts for about 70 percent of GDP -- may struggle to pick up amid tepid wage gains, rising debt and gradually increasing borrowing costs as the Federal Reserve tightens monetary policy.