Economic activity increased 1.9% in last year’s fourth quarter, the Bureau of Economic Analysis reports, slightly below expectations. Compared with the strong 3.5% rise in Q3, today’s update looks worrisome. But closer inspection, using year-over-year comparisons, shows that nothing much has changed – moderate growth endures. In fact, the trend picked up a bit.
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In its first week in office, the Trump administration has reaffirmed that trade agreements are in the crosshairs. The Trans Pacific Partnership Agreement (TPPA) was the first victim. Trade between Mexico and the US appears to be the next domino to fall. The US stock market, so far, doesn’t seem to have a problem with the rise of anti-trade actions and rhetoric in Washington. But the slowing and perhaps the reversing of the decades-long policy of embracing free trade comes with risks for the US economy.
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