Two sources of financial information — one that looks back and one that peers ahead — suggest that the U.S. economy is poised for continued growth in the new year.
The Commerce Department said Friday that the nation’s gross domestic product rose at an annual rate of 2.6 percent in the fourth quarter last year after an increase of 3.2 percent in the previous quarter.
For all of 2017, the department said GDP rose 2.3 percent, up from 1.5 percent in 2016.
The department said the increase reflected positive contributions from exports, personal spending, residential and nonresidential fixed investment, federal, state and local government spending and an upturn in residential fixed investment.
The government said disposable personal income rose by 3.9 percent, or $139 billion, in the fourth quarter, up from a gain of 2.1 percent, or $73.8 billion, in the third quarter.
Personal saving amounted to $384.4 billion in the fourth quarter, down from $478.3 billion in the previous quarter. The personal saving rate was 2.6 percent in the quarter, down from 3.3 percent in the previous period.
Meanwhile, The Conference Board said Thursday that its Leading Economic Index rose 0.6 percent in December, to 107, after an 0.5 percent increase in November and a 1.3 percent rise in October.
“The U.S. LEI continued rising rapidly in December, pointing to a continuation of strong economic growth in the first half of 2018. The passing of the tax plan is likely to provide even more tailwind to the current expansion,” Ataman Ozyildirim, director of business cycles and growth research at The Conference Board, said in a statement.
“The gains among the leading indicators have been widespread, with most of the strength concentrated in new orders in manufacturing, consumers’ outlook on the economy, improving stock markets and financial conditions,” Ozyildirim added.
In a sign of strength for manufacturing, new orders for manufactured durable goods rose by $7 billion, or 2.9 percent, to $249.4 billion, the Commerce Department said Friday. The department said orders have increased four times during the past five months.
The department said shipments of manufactured durable goods increased by $1.5 billion in December, or 0.6 percent, to $246.8 billion, after a 1.3 percent November increase. Shipments have been up in seven of the past eight months.
The housing market struggled in December, although 2017 as a whole was a good year for the industry.
The Commerce Department said sales of new single-family houses fell 9.3 percent in December, to a seasonally adjusted annual rate of 625,000, from the revised November rate of 689,000.
For the year, however, an estimated 608,000 new homes were sold, 8.3 percent above the 2016 figure of 561,000.
“We expect demand for single-family housing to remain robust, driven by job gains and the aging of the millennial generation into prime home-buying ages,” Ben Ayers, senior economist at Nationwide in Columbus, Ohio, told Reuters.
The market for existing homes did not fare much better during the month. The National Association of Realtors said home resales fell 3.6 percent in December, to a seasonally adjusted annual rate of 5.57 million, from 5.78 million in November.
As with new-home sales, 2017 was a positive year. The NAR said sales rose 1.1 percent, to a 5.51 million sales pace, and surpassed 2016 (5.45 million) as the highest since 2006 (6.48 million).
NAR chief economist Lawrence Yun said in a statement that the housing market did remarkably well last year.
“Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,” Yun said.
“At the same time, market conditions were far from perfect,” Yun added. “New listings struggled to keep up with what was sold very quickly, and buying became less affordable in a large swath of the country. These two factors ultimately muted what should have been a stronger sales pace.”
Today economy watchers will see The Conference Board’s Consumer Confidence Index for January, and on Friday the University of Michigan will release its final Index of Consumer Sentiment for the month.
The Federal Open Market Committee, the Federal Reserve’s rate-setting panel, meets today and Wednesday, but is expected to leave interest rates alone at this meeting.
On Thursday we will see reports on fourth-quarter productivity, construction spending for December and motor vehicle sales for January, but the major report due out this week is the January jobs report, which the Labor Department will release on Friday.
Economists’ median forecast is that the nation added 171,000 jobs during the month. The unemployment rate is expected to remain at 4.1 percent.