The economic expansion is continuing at a slow but steady pace

THIS HAS BEEN A SLOW BUT RESILIENT EXPANSION

This economic expansion has been like a healthy tortoise – slow but steady. In fact, as of December, the expansion is in its ninth year, making it the third longest expansion since 1900. Growth accelerated in the third quarter after firming in the second, and rebuilding following a series of natural disasters, alongside tax reform, should add to growth. That said, U.S. growth may be limited moving forward by structural constraints.

The economy should grow faster moving into 2018

Growth should accelerate and stabilize through the end of 2018, reflecting a pick-up in exports, inventories, government spending and fiscal stimulus through tax reform. Stronger investment spending and an improving global economy should also be tailwinds. Regardless, weak productivity and labor force dynamics should prevent sustained growth at 3.0%, with growth likely slowing to 2% or less in 2019 and beyond.