Global Economy Grows at Slower Rate

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Man pushing snail up slowly ascending line on graph

Over the past year, the overall economy and United States and what’s the world has been very volatile. While 2017 saw significant growth in the stock market, it has seen some big drop offs so far this year. While people are beginning to get concerned about where the overall market is heading, there is some signs that the economy is continuing to be strong and that it could actually be doing better than most people thought (https://www.cnbc.com/2018/04/27/first-reading-on-q1-2018-gdp.html).

According to the Commerce Department, overall GDP in the first quarter of 2018 was up 2.3%. This is compared to the 2.0% expected grow rate. This means that the overall level of growth is up is higher than expected. While growth is higher than expected, it is still slower than it has been in the past. Over the past few years, the economy had seen growth rates of closer to 3%, but it now appears that the economy could be hitting a point of stabilization.

Most people say that the economy should continue to grow in the coming year as well. There are many reasons why people believe that the economy will continue to grow. One of the main reasons why is due to an influx of free cash flow due to the reduction in taxes. Millions of people and businesses across the country have received a major tax cut over the past year, which should allow for organizations to invest in the economy and encourage consumer spending.

While there are plenty of reasons for encouragement for the rest of the year, there are some concerns as well. One of the biggest concerns is the impact that interest rates will have on the rest of the economy. Interest rates are still near historically low levels, but rates are continuing to rise. This will make it more expensive to purchase homes, take out loans, and buy other products.

Another factor that could change the economy the rest of the year is whether the stock market will continue to be volatile. After a very good 2017 year, the 2018 year has been much more inconsistent. There have been periods of very good days, but the year has also seen some of its largest daily drops ever, which could push more people to pull their capital out of the stock market entirely. This could then lead to an even larger sell off, which could be bad for the markets.

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