Weekly Market Commentary 1/19/2018

With this week’s housing and production reports, most important data for the fourth quarter is now in the books. And despite the softer than expected headline reading in this week’s reports, the verdict for the period is pretty clear cut: the economy ended the year on a solid footing. Upcoming data on inventories, trade and personal incomes could sway the results somewhat, but so far real GDP is tracking a growth rate of roundly 3.0%. By historical yardsticks, that would be a decent but hardly a spectacular pace. In most postwar expansions, 3.0% would not even qualify as an average growth rate. The current upturn, however, has registered an average growth rate of 2.3%, so 3.0% rates as an unqualified success. Even more encouraging is that it would be the third consecutive quarter to hit or exceed 3.0% in more than a decade.