An Economic Report Card – January 27, 2020

On Thursday, the U.S. BEA will release fourth quarter Gross Domestic Product (GDP), the broadest measure of the value of goods and services.

• Economists surveyed by Econoday estimate 4.1% annualized growth.
• The Atlanta Fed’s GDPNow model tracks growth at 7.5%.
• Q3 came in at a record 33.4%.

Estimates are subject to change.

The headline number is much like a GPA on a report card. The student may excel in some classes and struggle in others.

Strengths

Housing, manufacturing, autos, investment by businesses, and technology have been strong.

Sluggishness

Consumer spending has flattened, and industries that depend on personal interaction such as restaurants, movie theaters, hotels, sporting events, and airlines remain under pressure because of social distancing restrictions.

Investor’s corner

The initial read in early 2021 surveys suggests the economy is expanding as the year begins. But layoffs are elevated.

Investors have pushed stocks to new highs amid the belief that interest rates will remain low and the economy and corporate profits will grow this year.

Further, the development of two effective vaccines has bolstered the outlook, though the distribution has been plagued with problems.

While there is cause for cautious optimism, investors who continue to adhere to a well-diversified financial plan are in the best position to obtain their financial goals in today’s uncertain outlook.

Created 2021-01-27 21:01:28