Leading indicators continue to point to a vibrant national economy, but trade battles, the coming presidential election, and a possible presidential impeachment vote are making many investors nervous.
So concludes a report just issued by the American Institute of Economic Research, which notes that the Gross Domestic Product rose by a marginal 1.9 percent between July and September of this year, slightly down from a 2 percent increase recorded earlier this spring.
“Consumer spending accounted for the entire gain in the gross domestic product in the third quarter as other sectors had small offsetting contributions,” notes the November Business Conditions Monthly report.
The primary source for both consumer spending and consumer confidence remains a resilient labor market, continues the report.
But the picture is anything but rosy. Increasing concerns about trade policy, monetary policy, and immigration policy holds the potential of undermining consumer confidence.
Plus, notes the report, “extreme partisanship in Washington is likely to worsen as impeachment proceedings ramp up and the 2020 election cycle gains momentum.”
All of these factors are contributing to a “heightened degree of uncertainty.”
Even so, for now, the economy continues to be buffeted by new job creation, with the construction industry leading the way with more than 10,000 jobs in the last quarter.
The healthcare and financial industries also posted significant job growth heading into the fall of this year.
The American Institute for Economic Research is based in Great Barrington, Massachusetts.
By Garry Boulard