Investment Clock insights

US GDP growth could hit 3% by 2018 if Trump stimulus delivers


Ian Kernohan

27 January 2017

US GDP growth was estimated at 1.9% on an annualised basis in the final quarter of 2016, and just 1.6% for the calendar year.  However, this relatively slow expansion was still sufficient to drive employment levels higher and unemployment lower, leading to a pick-up in wage growth.  
Going forward, much will depend on the scale and timing of any fiscal stimulus by the new Trump administration, which could push US GDP growth to over 3% by 2018.  We do not expect the US Federal Reserve to raise interest rates again until May, when they will have greater visibility on the new administration’s plans.

US GDP growth was estimated at 1.9% on an annualised basis in the final quarter of 2016, and just 1.6% for the calendar year.  However, this relatively slow expansion was still sufficient to drive employment levels higher and unemployment lower, leading to a pick-up in wage growth.

Going forward, much will depend on the scale and timing of any fiscal stimulus by the new Trump administration, which could push US GDP growth to over 3% by 2018.  We do not expect the US Federal Reserve to raise interest rates again until May, when they will have greater visibility on the new administration’s plans.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.