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July 17, 2017 Article 4 minute read
Our quarterly Economic Perspectives provide updates and insights on economic and market developments.

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Executive summary 

  • The final estimate of Q1 GDP indicated that the economy grew at a 1.4 percent rate. While this was an improvement from the initial estimate 0.7 percent, it marked a notable slowdown from the 2.1 percent pace recorded in Q4 2016. Consumer spending, which represents a majority of the U.S. economy, dropped to its lowest reading since 2013 at 1.1 percent.
  • Inflation edged lower during the second quarter after peaking earlier in the year, as CPI decelerated to a 1.9 percent year-over-year rate. Declining energy prices, particularly gasoline prices, have been a source of weakness for inflation in 2017.
  • After holding off in May, the Federal Reserve raised short-term interest rates another quarter point at its June meeting, citing an economy approaching full employment and inflation comfortably moving toward its target despite recent transitory weakness. The Fed has indicated intentions for one more rate increase in 2017, as well as an eventual reduction of its balance sheet.
  • Job growth strengthened in the second quarter, with the economy adding 194,000 jobs per month in Q2 after averaging 166,000 in Q1 and 187,000 in 2016. The unemployment rate, at 4.4 percent, is near a cyclical low.

View the full Q2 Economic Perspectives >>