The Electronic Transactions Association, in partnership with The Strawhecker Group, is pleased to release this Strategic Leadership Forum (SLF) special report on the U.S. economy, focused within the context of the electronic payments ecosystem. This report is a member benefit provided to the ETA’s 500+ worldwide member companies.
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HIGHLIGHTS: After a Slow Start to 2017, U.S. Economy Shifts Into Higher Gear
The economy has rebounded after a slow start to 2017, bringing the growth rate for the first half of the year to just under 2 percent. In 2016, the economy expanded at an annual rate of 1.5 percent. The growth was driven by gains in household and business spending. In the second half of the year, economists predict growth will remain in the range of 2 percent to 2.5 percent. Sectors like technology, healthcare and banking are thriving, even as industries such as retail shed jobs. Clearly, the stock market has also reached new heights.
The White House has said that its long-term target for growth is 4 percent. The last time annual economic growth topped 4 percent was in 2000, at the end of the tech-fueled boom of the late 1990s. While the 4.4 percent unemployment rate is the lowest in a decade, wage growth remains slow.
The economy has benefited from steady consumer spending. Retail sales excluding gasoline in 2017 are expected to rise by 4 percent, up a bit from its 3.8 percent pace in 2016. Demand for automobiles, appliances and furniture contributed to the growth. Building materials sales should have a strong year, mirroring the strength in housing construction in general. In addition, restaurant sales are slowing to a more sustainable growth pace this year.
eCommerce sales are expected to now grow 14 percent this year, slightly less than the 15 percent gain in 2016. eCommerce has shown solid growth over the past seven years, and is expected to account for 9 percent of all retail sales (13 percent of all goods sales) by the end of 2017. On the other hand, in-store sales are predicted to show 1.8 percent growth, a slight pickup from last year’s 1.4 percent gain.
The recent flurry of hurricanes may have dented Americans’ outlook over the past few weeks. However, economists expect the regions impacted to recover quickly and may even experience a bump in growth from rebuilding.