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Economic Update

March 2, 2017

U.S. GDP growth is expected to accelerate to 2.3% in CY2017 from 1.6% in CY2016. Consumer fundamentals remain solid as a tightening labor market supports incomes and spending. Business confidence has also improved, which should translate into greater capital spending this year, especially as the energy sector gradually recovers.
 
Manufacturing output has been slow to recover, as the strong dollar, weak capital spending and an inventory correction have restrained growth. Industrial production growth should improve to 1.5% in CY2017 after a 0.9% decline in CY2016 as investment picks up and the drag from inventories fades. A strengthening dollar is a potential risk to exports. Given the near-perfect correlation between fixed business investment and employment growth, it is important to have a policy environment that encourages capital spending and free trade.
 
Global GDP growth is forecasted at 2.6% in CY2017, after 2.3% growth in CY2016. Recent data shows accelerating global activity. Risks to the outlook include geopolitical tensions and the possibility of economic policy missteps around the globe.


CY2016 CY2017 CY2018
U.S. GDP 1.6 %2.3 % 2.5 %
U.S. Industrial Production -0.9 % 1.5 % 2.4 %
World GDP 2.3 % 2.6 % 2.8 %

All percentages are shown on a calendar year-over-year basis. Historical estimates are provided by the U.S. Department of Commerce, Bureau of Economic Analysis (BEA). For more information, please visit www.bea.gov.

Certain statements herein are considered forward-looking statements, such as statements relating to management's views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements.

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